Loan Calculator
- Updated
- Formula shown
- Free, no sign-up
Results
Monthly payment of $495.03 for 60 payments, with $4,702 of interest in total
- Principal
- $25,000
- Interest
- $4,702
| Year | Paid | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | $5,940.36 | $1,612.91 | $4,327.45 | $20,672.55 |
| 2 | $5,940.36 | $1,300.08 | $4,640.28 | $16,032.27 |
| 3 | $5,940.36 | $964.63 | $4,975.73 | $11,056.54 |
| 4 | $5,940.36 | $604.94 | $5,335.42 | $5,721.12 |
| 5 | $5,940.36 | $219.24 | $5,721.12 | $0.00 |
How to use the loan calculator
- Enter the amount you plan to borrow and the annual interest rate from the loan offer.
- Enter the term in years, plus any extra months (for example 4 years and 6 months).
- Pick how often you pay. Leave compounding on "Same as payments" unless your lender says otherwise.
- Read the payment, the total interest and the year-by-year schedule. Use "Show all" to see every year.
Loan payment formula
r = annual rate ÷ payments per year
n = years × payments per year
This is the standard annuity (amortization) formula used by banks and spreadsheet PMT functions. P is the amount borrowed, r is the interest rate for one payment period as a decimal, and n is the number of payments. Each payment first covers the interest on the remaining balance; the rest reduces the balance. Because the balance shrinks, the interest part falls and the principal part grows with every payment, even though the payment itself stays the same.
If interest compounds on a different schedule from your payments (some Canadian and UK loans compound semi-annually or daily), the calculator converts the annual rate into an equivalent rate per payment before applying the formula, and shows the resulting effective annual rate.
Worked example: a $25,000 loan at 7% for 5 years
With monthly payments, r = 0.07 ÷ 12 = 0.005833 and n = 60. The payment is $495.03 a month. Over five years you pay $29,702, so the loan costs $4,702 in interest. In the first year $1,613 of your payments goes to interest and $4,327 to the balance.
Paying every two weeks instead means 130 payments of $228.18 and $4,663 of interest, slightly less because the balance is reduced a little sooner. Stretching the same loan to 7 years drops the monthly payment to $377.32 but raises the interest to $6,695.
Monthly payment per $10,000 borrowed
Multiply by the number of $10,000s you plan to borrow. For example, a $30,000 loan costs three times the figure shown.
| Rate | 3 years | 5 years | 7 years | 10 years |
|---|---|---|---|---|
| 4% | $295.24 | $184.17 | $136.69 | $101.25 |
| 6% | $304.22 | $193.33 | $146.09 | $111.02 |
| 8% | $313.36 | $202.76 | $155.86 | $121.33 |
| 10% | $322.67 | $212.47 | $166.01 | $132.15 |
| 12% | $332.14 | $222.44 | $176.53 | $143.47 |
| 14% | $341.78 | $232.68 | $187.40 | $155.27 |
Tips for comparing loans
- Compare the APR, not only the rate. Fees raise the true cost of borrowing. The personal loan calculator shows how an origination fee changes the APR.
- A lower payment is not a cheaper loan. Longer terms cut the payment but add interest, as the example above shows. Choose the shortest term whose payment fits your budget comfortably.
- Extra payments save the most early on. Interest is charged on the balance, so paying down principal in the first years has the biggest effect. Try it in the amortization calculator.
- Check for prepayment penalties. Most consumer loans let you repay early without a charge, but some business and older loans do not. Read the loan agreement before paying extra.
Results are estimates based on a fixed rate and payments made on time. Your lender's figures may differ by a few cents because of rounding and the exact day count they use.
Frequently asked questions
What is the monthly payment on a $25,000 loan at 7% for 5 years?
About $495.03 a month. Over 60 payments you repay $29,702 in total, of which $4,702 is interest. The same loan over 3 years costs $771.93 a month and $2,789 in interest.
How is the interest on a loan calculated?
Each period the lender charges the periodic rate on the balance you still owe. On $25,000 at 7% a year, the first month is charged 25,000 × 0.07 ÷ 12 = $145.83 of interest; the rest of the payment reduces the balance, so the next month’s interest is a little lower.
Does a longer loan term cost more?
Yes, almost always. A longer term lowers the payment but you pay interest for more years. $25,000 at 7% costs $2,789 in interest over 3 years, $4,702 over 5 years and $6,695 over 7 years.
Do bi-weekly payments save interest?
A little. Paying every two weeks (26 payments a year at the same annual rate) reduces the balance slightly sooner. On $25,000 at 7% for 5 years that means 130 payments of $228.18 and $4,663 of interest, about $39 less than paying monthly.
What is the difference between the interest rate and the APR?
The interest rate sets your payment. The APR (annual percentage rate) also counts up-front fees such as an origination fee, so it shows the full yearly cost of borrowing. Compare loans by APR; with no fees the two are the same.