Loan Calculator
Calculate monthly payments, total interest, and view a full amortization schedule. Works for mortgages, car loans, personal loans, and more.
| # | Payment | Principal | Interest | Balance |
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How Loan Payments Are Calculated
When you take out a fixed-rate loan, each monthly payment is the same amount for the entire term. But what happens behind the scenes is more interesting: early payments are mostly interest, while later payments are mostly principal. This is called amortization.
The Amortization Formula
The standard formula for calculating a fixed monthly payment on a loan is:
M = monthly payment
P = principal (loan amount)
r = monthly interest rate (annual rate ÷ 12)
n = total number of payments
r = 0.065 ÷ 12 = 0.005417, n = 360
M = 250,000 × [0.005417 × (1.005417)³⁶⁰] / [(1.005417)³⁶⁰ − 1]
M = $1,580.17 per month
Total paid: $568,861 — of which $318,861 is interest.
Understanding Amortization
An amortization schedule shows the breakdown of each payment into principal and interest. In the first month of the example above, about $1,354 goes to interest and only $226 goes to principal. By the final year, almost the entire payment goes to principal. This calculator generates the full schedule so you can see exactly how your loan balance decreases over time.
The Impact of Extra Payments
Making extra payments directly reduces the principal balance, which means less interest accrues in future months. Even an extra $100–$200 per month on a 30-year mortgage can save tens of thousands of dollars in interest and cut years off your loan. The "With Extra Payments" tab lets you see exactly how much you'd save.
How Much Can You Afford?
The Affordability tab works in reverse: given a monthly payment you're comfortable with, it calculates the maximum loan amount. This is useful when house-hunting or comparing loan terms. A common guideline is to keep your total housing payment under 28% of your gross monthly income, though this varies by situation.
Frequently Asked Questions
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It uses the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate, and n is the total number of payments. This gives you a fixed monthly payment for the life of the loan.
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An amortization schedule is a table showing each monthly payment broken down into principal and interest, along with the remaining balance. It illustrates how early payments are mostly interest while later payments are mostly principal.
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Extra monthly payments go directly toward reducing the principal. This reduces the total interest paid and shortens the loan term. Even small extra payments can save significant money — sometimes tens of thousands of dollars on a mortgage.
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The interest rate is the cost of borrowing the principal. APR (Annual Percentage Rate) includes the interest rate plus fees, points, and other costs — giving a fuller picture of the total loan cost. This calculator uses the interest rate.
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Yes. This calculator works for any fixed-rate loan: mortgages, car loans, personal loans, student loans. Enter the amount, rate, and term. Note that mortgage payments often also include taxes and insurance (PITI), which this calculator doesn't cover.
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A common guideline is the 28/36 rule: spend no more than 28% of gross monthly income on housing costs, and no more than 36% on total debt payments. However, this varies by personal circumstance, location, and lender requirements.