Loan Payment Calculator
Enter any loan amount, annual interest rate (APR), and term in months to find your fixed monthly payment, total interest, and complete amortisation schedule. This calculator works for personal loans, auto loans, student loans, or any fixed-rate installment loan. It uses the standard PMT (payment) formula that lenders use to calculate loan disclosures required under Regulation Z (Truth in Lending Act). The amortisation schedule shows how each monthly payment is split between principal and interest. Early in the loan, most of each payment covers accumulated interest; as the balance shrinks, more of each payment goes toward principal. Paying extra amounts early in the loan significantly reduces total interest and shortens your payoff date. The calculator shows the total amount paid, total interest charges, and interest as a percentage of the original loan amount. Understanding amortisation helps you see why even small extra payments accelerate payoff and save money. You can view the full amortisation schedule by month to track principal reduction and interest allocation across all payment periods.
A $15,000 loan at 7.5% APR for 48 months: monthly payment $362.68, total interest $2,408.81.
Amortization schedule
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| Enter values above to see the schedule. | ||||
How loan amortization works
With a standard fixed-rate amortizing loan, every monthly payment is the same dollar amount, but the split between interest and principal shifts over time. In the early months, most of each payment covers the interest that has accrued on the large outstanding balance. As payments reduce the balance, less interest accrues each month, so a greater share of each payment chips away at the principal. By the final payment, almost the entire amount goes to principal.
This pattern, called amortization, is why paying a little extra each month early in a loan can significantly cut your total interest cost. Even one extra payment per year can shave months off a multi-year loan.
Understanding APR
The interest rate on a loan refers only to the cost of borrowing the principal, stated as a yearly percentage. The APR (Annual Percentage Rate) is a broader measure: it includes the interest rate plus fees the lender charges (such as origination fees, broker fees, or required insurance), expressed as a single yearly figure.
Under Regulation Z (the Truth in Lending Act), lenders in the United States must disclose the APR before you sign. When comparing two loan offers, always compare APRs rather than nominal interest rates to get a fair cost comparison. More detail is available at CFPB: Interest rate vs APR.
Worked example with default values
Using the default inputs: $15,000 loan, 7.5% APR, 48 months.
r = 7.5 / 100 / 12 = 0.00625 (monthly rate)
n = 48 (payments)
PMT = 15,000 x 0.00625 x (1.00625)^48 / ((1.00625)^48 - 1)
PMT = 15,000 x 0.00625 x 1.34986 / (1.34986 - 1)
PMT = 15,000 x 0.008436 / 0.34986
PMT = 126.54 / 0.34986 = approximately $361.65 per month
- Total paid = $361.65 x 48 = approximately $17,359.20
- Total interest = $17,359.20 - $15,000 = approximately $2,359.20
- Interest as % of loan = 2,359.20 / 15,000 = approximately 15.7%
Exact figures may differ slightly due to rounding in the worked example above. The calculator uses full floating-point precision.
Reading the amortization breakdown
The amortization table above shows each month's payment split into its principal and interest components, plus the remaining balance after that payment. The first few rows show the highest interest amounts. The last row shows the final payment clearing the balance to zero. Use the "Show full schedule" button to expand all rows and see the complete month-by-month picture.
If you are comparing loan terms, run the calculator twice and note how a shorter term raises the monthly payment but lowers total interest, while a longer term reduces the monthly payment at the cost of more interest overall.
Why the monthly payment is the wrong number to compare
The number most borrowers fixate on, the monthly payment, is the least useful one for comparing loans. Two offers can carry the identical $362 payment yet cost hundreds of dollars apart once you account for fees folded into the APR or a term stretched by an extra year. Sort competing quotes by total interest and by APR, not by the payment your budget can absorb. A longer term always shrinks the payment and always grows the lifetime interest bill, and this calculator lets you run both terms side by side to see that trade in dollars rather than in feelings.
A second point that surprises people is how heavily front-loaded the interest is. On a $15,000 loan at 7.5% for 48 months, the first payment sends roughly $94 to interest and only about $269 to principal, and by the final month that ratio has almost entirely flipped. That is exactly why an extra $50 aimed at principal early in the schedule saves far more than the same $50 applied near the end.
One caution on scope: this tool models a fixed-rate, fully amortizing installment loan, the kind used for personal, auto, and student debt. It is not built for credit cards, interest-only loans, or anything with a variable rate or a balloon payment, where the payment you see today will not hold. Confirm your lender applies overpayments to principal, since some contracts carry prepayment terms.
Loan payment calculator: frequently asked questions
How is a loan payment calculated?
Lenders use the PMT (payment) formula from financial mathematics: payment = principal x r x (1+r)^n / ((1+r)^n - 1), where r is the monthly interest rate (APR / 12) and n is the number of monthly payments. This formula ensures each equal payment covers the interest accrued that month plus a portion of the principal, so the balance reaches zero on the final payment. Source: CFPB (consumerfinance.gov).
What is the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal only, expressed as a yearly percentage. The APR (Annual Percentage Rate) includes the interest rate plus fees such as origination fees or required insurance, giving a fuller picture of the total yearly cost. Under Regulation Z (Truth in Lending Act), lenders must disclose the APR so borrowers can compare offers on equal terms. Source: CFPB (consumerfinance.gov).
What happens if I pay more than the minimum each month?
Extra payments reduce the outstanding principal faster. Because interest each month is calculated on the remaining balance, a lower balance means less interest accrues. The result is that you pay off the loan sooner and pay less total interest over the life of the loan. Contact your lender to confirm how overpayments are applied, as some loans have prepayment terms.
How do I know if my loan rate is competitive?
Compare offers from at least three lenders before accepting a loan. Rates vary by lender, loan type, term, credit score and income. The CFPB's loan comparison tools and guidance are available at consumerfinance.gov. Your credit report (free annually at AnnualCreditReport.com) affects the rates you are offered, so reviewing it before applying can help.
Official sources
- CFPB, Personal loans: consumerfinance.gov, What is a personal loan?
- CFPB, APR explanation: consumerfinance.gov, Interest rate vs APR
- Truth in Lending Act (Regulation Z): CFPB, Regulation Z (12 CFR Part 1026)
Reviewed by the CalculatorHub team, edited by James Graham, 12 June 2026. See our methodology. General information, not financial advice.