Loan Calculator
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Calculate monthly payments, total interest, and total cost for any loan — car, personal, student, or business.
💳 Loan Calculator
Results update instantly
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
How to Use the Loan Calculator
Enter the loan amount
Input the total amount you need to borrow — not the item price. If financing a $25,000 car with $5,000 down, enter $20,000.
Set the annual interest rate
Input the APR from your lender offer. Always use APR (which includes fees) for comparisons, not the base interest rate.
Choose the loan term
Select the repayment period. Shorter terms have higher monthly payments but substantially lower total interest — compare this figure carefully across terms.
Review total interest paid
This is the true cost of borrowing. A $25,000 loan at 9.5% over 5 years costs $6,500 in interest alone — a figure that changes significantly with term length.
Fixed vs Variable Rate Loans: Which Is Better?
Fixed-rate loans maintain the same interest rate and payment for the entire term — ideal for budget certainty. Variable-rate loans adjust with a benchmark index (prime rate, SOFR) — lower initially but carrying payment risk if rates rise. For most consumer loans (auto, personal), fixed rates are standard and preferred. For home equity lines of credit (HELOCs) and some student loans, variable rates are common. When comparing fixed vs variable, model the variable rate at its maximum possible cap to understand worst-case payment exposure before choosing.
Comparing Lenders: What Actually Matters
When shopping loans, three figures matter most: the APR (includes all fees), the total interest paid over the full term, and the prepayment penalty terms. A loan with a 0.5% lower APR that has a 2% prepayment penalty is often worse than a slightly higher-rate loan with no penalty — particularly if you expect to pay early or refinance. Get quotes from at least three lenders, including your own bank or credit union, an online lender, and a competing institution. Pre-qualification typically uses a soft credit inquiry and does not affect your score.
Frequently Asked Questions
Sources & Methodology
Calculations are based on the most current publicly available data from authoritative government and industry sources: