Payment Calculator
- Updated
- Formula shown
- Free, no sign-up
Results
Monthly payment of $488.26 for 48 months, $3,436 of interest in total
| Year | Paid | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | $5,859.10 | $1,440.31 | $4,418.79 | $15,581.21 |
| 2 | $5,859.10 | $1,073.55 | $4,785.55 | $10,795.66 |
| 3 | $5,859.10 | $676.35 | $5,182.75 | $5,612.91 |
| 4 | $5,859.10 | $246.19 | $5,612.91 | $0.00 |
How to use the payment calculator
- Choose Monthly payment if you know the loan term, or Time to pay off if you know what you can pay each month.
- Enter the loan amount and the annual interest rate.
- Enter the term in years and months, or the monthly payment.
- Check the total interest and the schedule by year to see how the balance falls.
Payment and payoff-time formulas
Fixed payment: n = −ln(1 − r × P ÷ Payment) ÷ ln(1 + r)
P is the loan amount, r the monthly rate (annual rate ÷ 12, as a decimal) and n the number of monthly payments. The second formula is the first one solved for n, the same as the NPER function in a spreadsheet. It usually gives a fraction, such as 44.2; that means 44 full payments and a smaller 45th one, so the calculator rounds up and shows the size of the final payment.
The second formula only works when the payment is larger than the monthly interest (r × P). If it is not, the balance never goes down, and the calculator tells you the minimum you would have to beat.
Worked examples
Fixed term. Borrowing $20,000 at 8% for 4 years: r = 0.08 ÷ 12 and n = 48, so the payment is $488.26 a month and the interest totals $3,436.
Fixed payment. If you pay $500 a month on the same loan instead, n = −ln(1 − 0.006667 × 20,000 ÷ 500) ÷ ln(1.006667) and the loan is repaid in 47 months (3 years 11 months), with a final payment of $339.43 and $3,339 of interest. Raising the payment to $600 cuts that to 38 months and $2,694.
Months to repay $10,000
How long a fixed monthly payment takes to clear a $10,000 balance at different interest rates.
| Monthly payment | 5% rate | 10% rate | 15% rate | 20% rate |
|---|---|---|---|---|
| $200 | 57 months | 65 months | 79 months | 109 months |
| $300 | 36 months | 40 months | 44 months | 50 months |
| $400 | 27 months | 29 months | 31 months | 33 months |
| $500 | 21 months | 22 months | 24 months | 25 months |
| $750 | 14 months | 15 months | 15 months | 16 months |
At 20%, a $200 payment barely covers more than the interest, which is why it takes 109 months. Doubling it to $400 clears the balance in 33 months.
Payment versus affordability
The calculator tells you what a loan costs, not whether you can afford it. Before you commit, add the payment to your other fixed costs and check what is left in a normal month. Lenders also look at your debt-to-income ratio, so a payment that fits your budget may still affect how much else you can borrow.
Getting the most from the result
- Leave room in the budget. Pick a payment you can keep up through a bad month, then pay extra when you can.
- Small increases go a long way when the rate is high, because more of each payment goes to principal. The debt payoff calculator shows the interest an extra payment saves.
- Need weekly or bi-weekly payments? Use the loan calculator, which supports other payment frequencies, or the amortization calculator for a payment-by-payment table.
All results assume a fixed interest rate and on-time payments with no new borrowing. Your lender may round payments slightly differently.
Frequently asked questions
What is the monthly payment on a $20,000 loan at 8% for 4 years?
About $488.26 a month. Over 48 payments you pay $3,436 in interest on top of the $20,000 you borrowed.
How long does it take to pay off $20,000 at 8% with $500 a month?
47 months, just under 4 years. The first 46 payments are $500 and the last one is $339.43, for $3,339 of interest in total.
How much faster is the payoff if I pay $100 more a month?
On $20,000 at 8%, raising the payment from $500 to $600 shortens the loan from 47 to 38 months and cuts the interest from $3,339 to $2,694.
What happens if my payment is less than the interest?
The balance never goes down. A $10,000 balance at 24% is charged $200 of interest a month, so any payment of $200 or less would never repay it. The calculator warns you and shows the minimum you need to beat.
Why is my final payment smaller than the others?
A fixed payment rarely divides the loan exactly, so the last payment only has to clear what is left plus that month’s interest. The calculator shows that final amount separately.