Loan calculator
The monthly payment and total cost of any fixed-rate loan, month by month.
Result
- Monthly payment
- $500.95
- Loan amount
- $25,000.00
- Total interest
- $5,056.96
- Total paid
- $30,056.96
- Interest as share of total
- 16.8%
- Payoff
- 5 years (60 payments)
Amortization schedule
| Payment | Amount | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | $500.95 | $156.25 | $344.70 | $24,655.30 |
| 2 | $500.95 | $154.10 | $346.85 | $24,308.45 |
| 3 | $500.95 | $151.93 | $349.02 | $23,959.43 |
| 4 | $500.95 | $149.75 | $351.20 | $23,608.23 |
| 5 | $500.95 | $147.55 | $353.40 | $23,254.83 |
| 6 | $500.95 | $145.34 | $355.61 | $22,899.22 |
| 7 | $500.95 | $143.12 | $357.83 | $22,541.39 |
| 8 | $500.95 | $140.88 | $360.07 | $22,181.32 |
| 9 | $500.95 | $138.63 | $362.32 | $21,819.00 |
| 10 | $500.95 | $136.37 | $364.58 | $21,454.42 |
| 11 | $500.95 | $134.09 | $366.86 | $21,087.56 |
| 12 | $500.95 | $131.80 | $369.15 | $20,718.41 |
How this was calculated
Monthly interest rate
r = annual rate ÷ 12
7.5% ÷ 12 = 0.00625
Number of payments
n = term in months
n = 60
Monthly payment
M = P × r ÷ (1 − (1 + r)^−n)
$25,000.00 × 0.00625 ÷ (1 − 1.00625^−60) = $500.95
Total interest
Total paid − loan amount
$30,056.96 − $25,000.00 = $5,056.96
What this calculation assumes
- A fixed rate and equal monthly payments (a standard amortizing loan), paid at the end of each month.
- Interest is charged monthly on the remaining balance at the annual rate ÷ 12, and each month's interest is rounded to the cent. The last payment absorbs any rounding.
- Origination fees, insurance and taxes are not included. A loan quoted as an APR may already include fees.
- Extra payments go to principal every month from the first payment, with no prepayment penalty.
Estimates for information only. They are not financial advice, a loan offer or a guarantee of any return, rate or approval. Lenders and providers calculate with their own terms; check yours before you decide.
How a fixed-rate loan is repaid
Car loans, personal loans and most student loans are amortizing: you pay the same amount every month, and each payment covers that month's interest first and then reduces the balance. Because the balance falls, the interest part shrinks and the principal part grows over time.
The formula
M = P × r ÷ (1 − (1 + r)^−n)
P is the amount borrowed, r is the annual rate ÷ 12 and n is the number of months. Example: $25,000 at 7% for 5 years (60 months) gives r = 0.0058333 and a payment of $495.03; over the whole loan you pay $4,701.82 in interest.
Each month's interest is rounded to the cent and the final payment absorbs the rounding, the way lenders' statements work, so the schedule adds up exactly. Download it as a CSV to open in a spreadsheet.
Questions people ask
Does a longer term save money?
A longer term lowers the monthly payment but raises the total interest, because the balance stays higher for longer. Pin a 5-year scenario, then change the term to 7 years to see both.
What is a good interest rate?
It depends on the loan type, your credit and current market rates. Compare offers by APR, which includes fees, and use this calculator to see the payment for each.
Can I use this for a mortgage?
Yes for principal and interest, but the mortgage calculator also adds property tax, insurance, PMI and HOA fees.