How do you calculate monthly loan payments?

Monthly loan payment is calculated using the formula: M = P * [r(1+r)^n] / [(1+r)^n - 1], where M is monthly payment, P is principal loan amount, r is monthly interest rate (annual rate ÷ 12), and n is total number of payments (years × 12).

What factors affect loan payments?

Loan payments are affected by four main factors: loan amount (principal), interest rate, loan term (length), and payment frequency. Higher loan amounts and interest rates increase payments, while longer terms decrease monthly payments but increase total interest paid.

What's the difference between fixed and variable interest rates?

Fixed interest rates remain the same throughout the loan term, providing predictable monthly payments. Variable rates can change based on market conditions, meaning your payments may increase or decrease over time.

How much can I afford to borrow?

A general rule is that your total monthly debt payments (including the new loan) shouldn't exceed 36-40% of your gross monthly income. For mortgages specifically, aim for no more than 28% of gross income for housing costs.

Free Loan Calculator

What is a Loan Calculator?

A loan calculator helps you determine your monthly payment amount, total interest paid, and payment schedule for various types of loans including mortgages, auto loans, personal loans, and student loans.

Key benefits: Compare loan offers, budget for monthly payments, understand total loan costs, and plan your finances effectively.

Formula: M = P × [r(1+r)^n] / [(1+r)^n - 1]
Where M = Monthly Payment, P = Principal, r = Monthly Interest Rate, n = Number of Payments

Loan Amount ($)

Annual Interest Rate (%)

Loan Term (years)

Loan Type

$0.00

Monthly payment calculation will appear here.

Loan Calculator Examples

Example 1: 30-Year Mortgage

Loan: $300,000 at 6.5% for 30 years

Monthly Payment: $1,896.20

Total Interest: $382,632 over the life of the loan

Use Case: Home purchase with conventional financing

Example 2: Auto Loan

Loan: $25,000 at 4.5% for 5 years

Monthly Payment: $465.51

Total Interest: $2,930.60 over 5 years

Use Case: New car financing with good credit

Example 3: Personal Loan

Loan: $15,000 at 8.5% for 3 years

Monthly Payment: $474.81

Total Interest: $2,093.16 over 3 years

Use Case: Debt consolidation or home improvement

Example 4: 15-Year Mortgage

Loan: $200,000 at 6.0% for 15 years

Monthly Payment: $1,687.71

Total Interest: $103,788 (vs. $231,676 for 30-year)

Savings: $127,888 in interest by choosing 15-year term

Loan Term Comparison

Loan Term	Monthly Payment	Total Interest	Total Paid
Enter loan details above to see comparison

How to Use the Loan Calculator: Complete Guide

Step 1: Enter Loan Details

Loan Amount: The total amount you want to borrow (principal)
Interest Rate: Annual percentage rate (APR) offered by the lender
Loan Term: Number of years to repay the loan
Loan Type: Select the type for context and tips

Step 2: Understanding Your Results

Monthly Payment: Fixed amount you'll pay each month
Total Interest: Total amount paid in interest over loan life
Total Amount: Principal + Total Interest
Payment Breakdown: How much goes to principal vs. interest

Step 3: Loan Shopping Tips

Compare APRs: Not just interest rates - APR includes fees
Consider Total Cost: Lower monthly payments may mean more interest
Check Your Credit: Better credit scores get better rates
Shop Around: Get quotes from multiple lenders

Types of Loans

🏠 Mortgage Loans

Purpose: Home purchases

Terms: 15-30 years

Rates: 6-8% (varies by market)

Features: Tax deductible interest, secured by property

🚗 Auto Loans

Purpose: Vehicle purchases

Terms: 3-7 years

Rates: 3-10% (based on credit)

Features: Secured by vehicle, lower rates than personal loans

💳 Personal Loans

Purpose: Any personal use

Terms: 2-7 years

Rates: 5-25% (based on credit)

Features: Unsecured, fixed payments, versatile use

🎓 Student Loans

Purpose: Education expenses

Terms: 10-25 years

Rates: 3-7% (federal), 4-12% (private)

Features: Deferred payments, income-driven options