Loan Calculator

How loan payments are calculated

Car loans, personal loans and most student loans are installment loans: you borrow a fixed amount and repay it in equal monthly payments over a set term. The payment comes from the amortization formula, payment = P × r(1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), with P the amount borrowed, r the monthly rate (annual rate ÷ 12) and n the number of payments. For $25,000 at 7.5% over 60 months, that's $500.95 a month and $5,056.92 of interest in total.

Each payment first covers the month's interest on the remaining balance; the rest pays down principal. Because the balance is largest at the start, early payments are interest-heavy and later ones are mostly principal.

How the term changes the cost

A longer term lowers the payment but stretches interest over more months. For a $30,000 loan at 7%:

In practice the gap is wider, because lenders usually charge higher rates on longer terms.

Auto loans

For a car loan, enter the price minus your down payment and trade-in value as the loan amount. Sales tax, title and registration are often rolled into the loan, so add them if you plan to finance them; the sales tax calculator gives the tax figure. Terms of 60 to 72 months are common, and 84-month loans exist, but a long term on a depreciating car can leave you owing more than it's worth for years. If a dealer quotes a payment, ask for the rate, term and total amount financed so you can check it here.

Personal loans

Personal loans are usually unsecured, with terms of two to seven years and rates driven mostly by your credit score. Many charge an origination fee taken out of the money you receive, so a $10,000 loan with a 5% fee puts $9,500 in your account. That fee doesn't change the payment here, but it raises the true cost; the APR calculator shows the rate with fees included, which is the number to compare between lenders.

Student loans

The standard federal repayment plan is 10 years of fixed payments, which this calculator models directly: enter your balance, rate and 120 months. Income-driven plans set payments from your income instead, so they don't follow this formula. Interest that built up while you were in school may be added to the balance when repayment starts, so use the current balance from your servicer, not the original amount borrowed.

Paying a loan off faster

Extra principal shortens the loan and cuts interest because every dollar paid early stops accruing interest for the rest of the term. On the default $25,000 loan, $100 extra a month pays it off 11 months early and saves about $1,014. Enter your own amount above. Check for prepayment penalties first, and make sure your lender applies extra money to principal.

How much can I borrow?

Start from the payment, not the loan amount. Many lenders want total monthly debt payments under about 36% of gross income. Subtract your existing payments from that limit, decide how much of what's left you're comfortable committing, then adjust the loan amount here until the payment fits. The paycheck calculator shows your take-home pay to budget against.

Sources

The formulas on this page come from the published research below. Last updated October 11, 2026. This calculator gives estimates for general information. It isn't medical advice, so check anything important with a qualified professional.

1. Consumer Financial Protection Bureau. What is amortization and how could it affect my auto loan?Used for: How fixed payments split between interest and principal over an installment loan
2. Consumer Financial Protection Bureau. What is a debt-to-income ratio?Used for: Debt-to-income guidance for how much to borrow