Loan Calculator
Calculate your monthly loan payment and see the full amortization schedule: how much of each installment goes to interest vs. principal.
Related tools
How to use
Enter the loan amount, the annual interest rate, and the term in years. The calculator returns your fixed monthly payment, the total interest you will pay over the life of the loan, and the total amount repaid. Switch to the Amortization Table tab to see, month by month, how each payment splits between interest and principal.
How the monthly payment is calculated
This calculator uses the French amortization system (fixed installments), the standard for bank loans, mortgages, and car loans. The formula is: M = P × i / (1 − (1 + i)^−n), where M is the monthly payment, P is the loan amount, i is the monthly interest rate (annual rate ÷ 12, as a decimal), and n is the total number of monthly payments.
Worked example: a $50,000 loan at 12% annual interest over 5 years. The monthly rate is 0.12 ÷ 12 = 0.01, and the number of payments is 60. M = 50,000 × 0.01 / (1 − 1.01^−60) = $1,112.22 per month. Over the full term you pay $66,733.34 in total, of which $16,733.34 is interest — one third of the original loan amount. To understand how that interest accumulates period by period, see our interest calculator.
The payment stays the same every month, but its composition changes: early payments are mostly interest, and late payments are mostly principal. That is why the amortization table matters more than the payment amount alone.
Reading the amortization table
In the example above, the very first payment of $1,112.22 splits into $500.00 of interest (1% of the $50,000 balance) and only $612.22 of principal. By the final payment, the split is reversed: about $11.01 of interest and $1,101.21 of principal. The interest column shrinks every month because it is always calculated on the remaining balance.
This structure has a practical consequence: in the first years of a long loan you build equity slowly. On a 20- or 30-year mortgage, after 5 years of payments you may have repaid surprisingly little principal. Checking the balance column of the table before signing tells you exactly where you will stand at any point.
It also explains why extra payments early in the loan save far more than the same extra payments made later: money applied to principal early avoids interest on that amount for all the remaining months.
What the advertised rate doesn't tell you
The interest rate is not the full cost of a loan. Lenders often add origination fees, mandatory insurance, and administrative charges. Two loans with the same rate can differ meaningfully in real cost. Where available, compare the APR or total cost figure the lender is required to disclose, and always ask for the total amount repaid — the single most honest number.
Also verify whether the quoted rate is annual or monthly. A '1.5% rate' that turns out to be monthly is an effective annual rate of about 19.6%, not 18%. If you spot a monthly rate, convert it before comparing with our effective interest rate calculator: effective annual = (1 + monthly)^12 − 1.
Frequently Asked Questions
Why is my first payment mostly interest?
Interest is calculated on the outstanding balance, which is largest at the start. As the balance falls, the interest portion of each fixed payment shrinks and the principal portion grows.
Does paying extra toward principal reduce my monthly payment?
Usually it shortens the loan term rather than lowering the payment, though some lenders let you choose. Either way, extra principal payments reduce the total interest you pay — and the earlier you make them, the more they save.
What is the difference between the French and German amortization systems?
The French system uses a fixed payment where the interest/principal mix changes over time. The German system amortizes a fixed amount of principal each month, so payments start higher and decrease. Most consumer loans use the French system.
How much of my income should go to loan payments?
A common guideline is that total debt payments should stay below 30–40% of net monthly income. Lenders apply similar ratios when evaluating applications, but a comfortable budget usually sits below the maximum a bank will approve.
Is a longer term better because the payment is lower?
A longer term lowers the monthly payment but increases the total interest substantially. In the $50,000 at 12% example, moving from 5 to 10 years drops the payment from $1,112 to $717, but total interest jumps from $16,733 to $36,100. Choose the shortest term you can afford comfortably.
Does this calculator include fees and insurance?
No — it calculates the pure interest cost using the rate you enter. Real loans often add origination fees and mandatory insurance, so the actual total cost will be somewhat higher. Ask your lender for the total amount repaid including all charges.