Loan Calculator
Loans & MortgagesKnow your payment, interest and payoff.
Loan details
Enter the amount you want to borrow to begin.
Advanced options
Enter the amount you want to borrow to begin.
Know what this estimate is based on
- Jurisdiction
- General model; U.S.-specific rules are identified on the relevant tool
- Scope and limitations
- Educational estimate only. A lender may use different compounding, day-count, eligibility, tax, insurance, escrow, fee, or rounding rules.
- Source links checked
- Jul 30, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the amount you want to borrow, the annual interest rate the lender quotes, and the loan term in years.
- 02
Open Advanced options to choose the payment frequency (monthly, biweekly or weekly), add an extra payment, set an origination fee, and enter your income for an affordability check.
- 03
Read your payment, total interest, fee-inclusive APR and total cost, see how extra payments shorten the term, and explore the full year-by-year amortization schedule.
Formula
A fixed-rate loan uses the standard amortization formula. With principal P, a periodic rate i = annual rate ÷ payments per year, and n = years × payments per year, the level payment is M = P × i × (1 + i)^n ÷ ((1 + i)^n − 1). When the rate is 0 the payment is simply P ÷ n. Each period the lender charges interest on the outstanding balance (balance × i); whatever is left of your payment after that interest reduces the principal. Total interest is the sum of every interest charge. Any extra payment is applied straight to principal, so it shrinks the balance and every interest charge that follows, ending the loan early. The APR goes one step further: it spreads any origination fee across the payments, solving for the rate that discounts the scheduled payments back to the cash you actually receive (the loan minus the fee), so it sits a little above the note rate whenever a fee applies.
Example
Suppose you borrow 25,000 at an annual rate of 7.5% over 5 years, paid monthly. The monthly rate is 7.5% ÷ 12 = 0.625% over 60 payments, which gives a payment of about 501. Across the 60 payments you repay roughly 30,040, so total interest is about 5,040. Add 50 a month on top and the loan clears around six months early, trimming a few hundred from that interest. Now add a 1% origination fee of 250: you still repay as if you borrowed 25,000 but only receive 24,750, so the effective APR rises above the 7.5% note rate. If your income is 4,000 a month, the 501 payment is about 13% of it — comfortably inside the rough one-quarter-to-one-third guideline lenders look for.
Definitions
- Loan amount
- The principal you borrow today, before any interest or fees.
- Annual interest rate
- The nominal yearly rate the lender charges, divided by the number of payments per year to get the periodic rate used in the schedule.
- Loan term
- How many years you take to repay; together with the payment frequency this sets the number of payments, n = years × payments per year.
- Payment frequency
- How often you pay — monthly, biweekly or weekly. Each payment covers a shorter span of interest, and an extra amount applied more often reaches the principal sooner.
- APR
- Annual percentage rate — the yearly cost including the origination fee, so competing offers can be compared like for like. With no fee it equals the note rate.
- Origination fee
- An upfront charge, entered here as a percent of the loan, that you effectively pay out of the money you receive. It raises the APR without changing the payment.
- Extra payment
- An optional amount paid above the scheduled payment, applied entirely to principal so the loan finishes early and total interest falls.
- Monthly income
- Your gross monthly income, used to judge affordability — the share of income the required payment consumes.
- Total interest
- Every interest charge added together over the life of the loan.
- Amortization
- The process of paying off a loan through level payments that shift gradually from mostly interest to mostly principal.
Good to know
How amortization splits every payment
A fixed-rate installment loan is repaid through amortization, a schedule in which you make the same level payment every month yet the makeup of that payment shifts steadily over time. Each month the lender first charges interest on whatever you still owe, calculated as the outstanding balance multiplied by the monthly rate. Whatever is left of your payment after covering that interest is used to reduce the principal. Because the balance is at its highest in the opening months, the interest slice is large and the principal slice is small, so the loan can feel as though it is barely moving. As the balance falls, each interest charge gets smaller, which frees up more of the same fixed payment to attack the principal. The result is a curve that starts slow and accelerates: in the final stretch almost the entire payment is reducing what you owe. A concrete way to picture it is to look at the very first and very last payments of any loan in the schedule — early on, the bulk is interest; near the end, the bulk is principal, even though the payment never changed. Understanding this front-loaded structure explains a great deal: why two loans with identical payments can leave you with very different remaining balances a few years in, why selling or refinancing early means you have built little equity, and why putting extra money toward the loan early saves so much more than the same amount paid late. It is also why the total interest figure can be surprisingly large relative to the amount you borrowed — the early years quietly accumulate most of it.
Why the term is the biggest lever on cost
The length of a loan is the single input that most dramatically reshapes both your monthly payment and your lifetime cost, and the two move in opposite directions. Stretching a loan over more years spreads the principal across more payments, so each one is smaller and easier to fit into a budget. But you also pay interest for more years, and the slower you reduce the balance, the more interest accrues against it. A loan repaid over a long term can easily cost far more in total interest than the same amount over a short term at the same rate, even though the headline payment looks friendlier. This is the trap behind shopping for the lowest monthly payment: a comfortable payment can quietly conceal an expensive loan. Consider the same amount borrowed over ten years versus twenty at one rate — the twenty-year payment is markedly lower, yet because interest runs for twice as long, the total handed to the lender can be dramatically higher. A more disciplined approach is to pick the shortest term whose payment you can sustain reliably through good months and lean ones alike, then treat the total-interest figure as the real price tag of the loan. There is also a middle path many borrowers overlook: choose a longer term for the safety of a low required payment, but voluntarily pay it down faster whenever you can, which gives you the flexibility of the small payment with much of the savings of the short term. The calculator's schedule makes the trade-off concrete — lengthen the term and watch the payment ease while the total interest climbs, then add an extra payment and watch the interest fall back.
Interest rate versus APR
The interest rate, sometimes called the note rate, is what determines your payment in the amortization formula. The APR, or annual percentage rate, is a broader measure that also folds in the upfront fees required to obtain the loan, expressing the whole cost as a single yearly percentage. Whenever a loan carries origination fees, points, or similar charges, its APR is higher than its note rate, because you are effectively repaying the full amount's schedule on slightly less cash than you received. This calculator reports both: leave the fee at zero and the APR equals the note rate, or enter an origination fee and it solves for the fee-inclusive APR alongside the note-rate payment, so you can see the true cost without leaving the page. When you are comparing competing offers, the note rate alone can be misleading: a lender advertising a slightly lower rate but heavy fees may cost you more than one with a higher rate and no fees. Two loans can even share the same payment while one is meaningfully more expensive, because its fees were taken off the top of what you received. The honest way to rank offers is therefore to look past the advertised rate to the APR, and past the APR to the total amount repaid, for the same loan amount and the same term. Keeping the distinction clear protects you from the most common form of loan marketing, where an eye-catching rate hides its real cost in the fine print of the fees.
Secured versus unsecured loans
Loans fall into two broad families depending on whether they are backed by collateral. A secured loan is tied to an asset — a house for a mortgage, a vehicle for an auto loan — that the lender can repossess if you stop paying. Because that collateral reduces the lender's risk, secured loans usually carry lower interest rates and allow larger amounts and longer terms, which is why a mortgage is far cheaper per dollar borrowed than a credit card. An unsecured loan, such as a personal loan or most credit cards, has no asset behind it; the lender relies on your promise to repay and your credit history, and prices the higher risk with a higher rate. The distinction matters well beyond the rate. With a secured loan, falling behind can cost you the asset, which raises the stakes of borrowing more than you can comfortably service — losing a home or a car has consequences that reach into the rest of your life. With an unsecured loan, the consequences land on your credit record and may involve collections and legal action, but you do not lose a specific possession. The type of loan also shapes how lenders judge you: secured lending leans heavily on the value of the collateral and your equity in it, while unsecured lending leans almost entirely on your credit profile and income. Knowing which kind of loan you are taking on helps you weigh both its price and its risk, and helps you understand why the rate you are offered is what it is. As a rule, reserve secured borrowing for assets you intend to keep and can afford to lose if life goes wrong, and treat unsecured borrowing as the more expensive convenience it usually is.
Fixed versus variable rates
A fixed-rate loan locks your interest rate for the entire term, so the payment this calculator shows stays the same from the first month to the last. That predictability makes budgeting simple and protects you if market rates rise, which is a genuine form of insurance against an uncertain future. A variable or adjustable-rate loan instead ties your rate to a benchmark that moves over time, often starting lower than a comparable fixed rate but with the possibility of rising — or falling — later. The initial saving can be attractive, especially if you expect to repay or refinance the loan before the rate can adjust much, or if you have the financial cushion to absorb a higher payment without strain. The risk is that rising rates lift your payment, sometimes substantially and at a time you cannot control, turning an affordable loan into a stretched one. Many variable products include caps that limit how far the rate can move at each reset and over the life of the loan; reading those caps matters, because they define your worst-case payment. As a rule of thumb, fixed rates suit borrowers who value certainty and plan to hold the loan a long time, while variable rates can suit those with shorter horizons, strong savings, or a firm exit plan. A useful exercise before accepting a variable rate is to ask whether you could still afford the payment if the rate climbed to its cap — if the answer is no, the early saving may not be worth the exposure. This tool models a fixed rate, so if you are quoted a variable one, treat its opening payment as a starting point rather than a guarantee, and stress-test your budget against a higher figure.
How extra payments rewrite the schedule
Because interest is always charged on the current balance, any money you pay above the scheduled amount goes straight to principal and permanently removes the future interest that principal would have generated. This is why even modest overpayments can have an outsized effect, particularly early in the term when the balance is large and each extra dollar cancels years of compounding interest. The mechanism is worth internalizing: an extra payment does not just shorten the loan by its own value, it also erases every interest charge that would have been levied on that amount for the rest of the term. There are several practical ways to overpay. You can add a fixed amount to every payment, which steadily accelerates the payoff. You can make one extra payment a year, perhaps from a bonus or tax refund. Or you can switch to a biweekly schedule that quietly produces the equivalent of a thirteenth monthly payment each year without feeling like a large change. Before you commit, confirm two things with your lender. First, that the loan has no prepayment penalty — some loans charge a fee for paying early, which can erode or reverse the benefit. Second, that extra amounts are applied to principal rather than simply prepaying your next scheduled payment, which would advance your due date without saving any interest. It is also worth weighing overpayment against other uses of the money: if you carry higher-rate debt elsewhere or lack an emergency fund, those usually deserve priority, since the guaranteed return on overpaying a loan equals its interest rate. The early-payoff readout in this calculator shows exactly how many months and how much interest a given extra payment removes, turning an abstract good habit into a concrete, motivating number you can act on.
Refinancing and consolidation
Refinancing replaces an existing loan with a new one, ideally at a lower rate or better terms, while consolidation rolls several debts into a single loan with one payment. Both can genuinely help — a lower rate cuts the interest you pay, and consolidation can simplify your finances and sometimes lower the blended rate across several balances. But both carry a subtle cost that is easy to overlook: resetting the clock. If you refinance a loan you have been paying for several years into a fresh long term, you return to the front-loaded part of the schedule where most of each payment is interest again, and you may pay more in total even at a lower rate. The lower monthly payment can feel like a win while the lifetime cost quietly rises. New loans can also carry their own origination fees, which must be earned back through the savings before the refinance truly pays off. The honest way to evaluate a refinance is to compare the total remaining cost of your current loan against the total cost of the proposed one, including any fees, rather than comparing the monthly payments or the headline rates alone. A simple test is the break-even period: divide the upfront cost of refinancing by the monthly saving to find how many months it takes to come out ahead, then ask whether you will keep the loan at least that long. Consolidation deserves an extra caution: combining several debts into one lower payment only helps if you do not then run the original balances back up, which can leave you worse off than before. Used deliberately, with the total cost firmly in view, both tools are valuable; used to chase a smaller payment without regard to the term, they can quietly cost you.
Reading your results and avoiding common traps
Three numbers deserve your attention together: the monthly payment, the total interest, and the payoff schedule. The payment tells you the recurring commitment that must fit comfortably within your income — not just on a good month, but through lean ones too, when income may dip or other costs spike. The total interest reveals the true price of borrowing, the amount you hand the lender on top of what you received, and it is the figure most worth minimizing over the life of the loan. The schedule shows how equity in the loan builds over time, which matters if you might sell or refinance before the end, since it tells you how much of the balance you will actually have cleared by then. The most common mistake borrowers make is optimizing for the payment alone, choosing the longest term or the offer with the smallest monthly figure without registering how much more it costs over the years. A second trap is borrowing the maximum a lender will approve rather than the amount you actually need, which leaves no margin for the unexpected and turns every setback into a crisis. A third is ignoring the difference between the rate and the APR, and so comparing offers on the wrong number. Treat the results here as a planning laboratory: model a few scenarios, change one input at a time, and see which lever — amount, rate, term, or extra payments — moves your cost the most. Almost always you will find that the term and any extra payments dominate the total interest, while the amount borrowed dominates the payment. Choose the loan you can repay with room to spare, keep the total cost in view alongside the monthly figure, and revisit the plan whenever your circumstances change.
Frequently asked questions
Why does so little of my early payment go toward the balance?
Interest is charged on the outstanding balance, which is largest at the start. Early payments therefore cover mostly interest and reduce principal slowly. As the balance falls, the interest portion shrinks and more of each level payment attacks the principal — which is why the last years repay far faster than the first.
Does a longer term make a loan cheaper?
It lowers the payment but usually raises the total interest, because you borrow the money for more years. A 20-year loan has a smaller payment than a 10-year loan at the same rate, yet you pay interest for twice as long. Always weigh the payment against the lifetime cost rather than choosing the smallest payment.
How much do extra payments really help?
Because every extra amount goes to principal, it erases all the future interest that money would have generated. Overpaying is most powerful early in the term when the balance — and so the interest saved — is largest. The schedule and the early-payoff readout show exactly how many months and how much interest a given extra amount removes.
What is the difference between the interest rate and the APR shown here?
The interest rate is the nominal rate the payment is built from. The APR also folds in the origination fee you enter, expressing the true yearly cost — so two offers can be compared like for like. With no fee the APR equals the note rate; with a fee it is higher, because you repay the full schedule on slightly less cash than you received.
Does switching to biweekly or weekly payments save money?
On its own, changing the frequency barely moves the total interest. The well-known savings from biweekly schedules really come from paying more. Because the extra here is applied to every payment, a weekly or biweekly cadence lets a small extra amount hit the principal more often, which does shorten the term.
How does the affordability check work?
If you enter your monthly income, the tool compares the required payment against it. Under about 28% is comfortable, up to 43% is stretched, and above 43% is the zone lenders often flag. The check uses the required payment only, so voluntary extra payments never count against you.
Are taxes, insurance, or PMI included?
No. This calculator covers principal, interest and an optional origination fee (which the APR reflects). Mortgages add property tax, homeowners insurance and sometimes PMI on top — use the Mortgage Calculator when you need that all-in housing cost.