Loan Calculator
Works for auto loans, personal loans, student loans — any fixed-rate loan with regular monthly payments.
Calculate any loan payment
How loan payments are calculated
Every fixed-rate installment loan — a car loan, a personal loan, most student loans — uses the same amortization formula. The lender sets a payment that stays identical every month and pays the loan to exactly zero on the final payment:
P is the amount borrowed, r is the monthly rate (annual rate ÷ 12), and n is the number of monthly payments. Early payments are mostly interest; later payments are mostly principal. The payment never changes — only the split inside it does.
A worked example
Borrow $25,000 for a car at 7.9% for 5 years. The monthly rate is 0.6583% and there are 60 payments. The formula gives a payment of about $506 per month. Over five years you'll pay roughly $30,340 in total, meaning the car cost you about $5,340 in interest on top of the price. Stretch the same loan to 7 years and the payment drops to about $389 — but total interest jumps to about $7,650. Longer terms feel cheaper monthly and cost more in reality. That trade-off is the single most important thing to understand before signing.
How to pay less interest
Three levers work every time. First, shorten the term — it's the most powerful lever and the formula above shows why. Second, improve the rate: even one percentage point on a $25,000 five-year loan is about $700 of interest, so getting pre-approved by a bank or credit union before you shop gives you a number the dealer or lender has to beat. Third, pay extra toward principal when your loan allows it without penalty; extra principal payments shorten the loan rather than lowering the payment, which is exactly what you want.
APR vs. interest rate
The interest rate is the cost of borrowing the money; the APR includes the rate plus certain mandatory fees, spread over the loan term. When comparing offers, compare APR to APR — it's the more honest number, and lenders are required to disclose it.
Frequently asked questions
Does this work for student loans?
Yes, for any fixed-rate student loan in normal repayment. It won't model income-driven repayment plans, which set payments from your income instead of the loan balance.
What's a good interest rate for a car loan?
It changes with the market and your credit. The honest answer: a good rate is the best of at least three real quotes — your bank, a credit union, and the dealer. Credit unions frequently win.
Should I take the longer loan term with the lower payment?
Only if the lower payment is genuinely necessary for your budget. The longer term always costs more in total interest, and on cars it increases the time you owe more than the vehicle is worth.
Can I just pay extra each month instead of refinancing?
Often, yes — extra principal payments shorten the loan and cut total interest with no fees or paperwork. Confirm your loan has no prepayment penalty, and make sure extra amounts are applied to principal.
Why doesn't my lender's payment match this exactly?
Small differences usually come from fees rolled into the loan, the exact day interest starts accruing, or rounding. Differences of a few dollars are normal; large gaps mean the loan includes costs you should ask about.