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Loan Calculator

Calculate monthly payments, total interest, and total cost for any loan — car, personal, student, or business.

✔ Amortization Formula🌍 Any Loan Type

💳 Loan Calculator

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How Loan Payments Are Calculated

All amortizing loans — personal loans, car loans, student loans — use the same standard formula. Each payment covers the interest accrued on the outstanding balance since the last payment, with the remainder reducing the principal. Because the balance decreases over time, less interest accrues each month, and more of your payment goes toward principal.

📐 Loan Amortization Formula

M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1]
M= Monthly payment
P= Loan principal
r= Monthly rate (annual ÷ 12)
n= Total months

Frequently Asked Questions

Making extra payments reduces the outstanding principal, which reduces future interest charges. For a 5-year $25,000 loan at 9.5%, paying an extra $100/month saves approximately $800 in interest and pays off the loan 7 months early.
Personal loan rates vary by credit score and lender: Excellent credit (740+): 6–12%; Good (670–739): 12–18%; Fair (580–669): 18–28%; Poor (<580): 28–36% or denied. Always compare the APR (Annual Percentage Rate), which includes fees, rather than just the interest rate.

A fixed-rate loan keeps the same interest rate and monthly payment for the entire term, making budgeting predictable. A variable-rate loan fluctuates with market rates — payments can rise or fall. Fixed rates suit those who value certainty; variable rates may start lower but carry risk over longer terms.

The interest rate is the base cost of borrowing — the percentage charged on the principal. APR (Annual Percentage Rate) includes the interest rate plus fees (origination fees, mortgage points, closing costs), expressed as an annual rate. APR is the better comparison tool for loans — always compare APRs, not just rates.
Pay biweekly instead of monthly — you make 26 half-payments (13 full payments) vs 12, saving one payment per year. Apply any windfall (tax refund, bonus) directly to principal. Round up monthly payments to the next $50 or $100. Even $50 extra/month on a $25,000 auto loan at 7% saves $1,200+ in interest.
⚠️ Disclaimer Estimates for informational purposes only. Not legal or financial advice. Consult a qualified professional.