Loan Calculator - Payments & Amortization

How the Loan Calculator Works

1. 01Enter the loan amount, annual interest rate, and loan term
2. 02Choose between fixed-rate and variable-rate calculations
3. 03View your monthly payment, total interest paid, and total cost
4. 04Explore the full amortization schedule showing principal vs. interest per payment

Understanding Loan Amortization

In an amortized loan, early payments are mostly interest while later payments are mostly principal. Making extra payments toward the principal can significantly reduce total interest and shorten the loan term. For example, paying just 50 extra per month on a 200,000 mortgage can save tens of thousands in interest. Always compare the Annual Percentage Rate (APR), which includes fees, rather than just the nominal interest rate.

When to Use the Loan Calculator

Use this tool when considering a mortgage, car loan, personal loan, or student loan. It calculates your exact monthly payment, shows how much total interest you will pay, and generates an amortization schedule so you can see the principal versus interest breakdown for every payment. Use the comparison feature to evaluate different loan terms side by side.

Common Use Cases

• —Calculating monthly mortgage payments before house hunting
• —Comparing 15-year versus 30-year loan terms to understand total interest costs
• —Estimating car loan payments with different down payment amounts
• —Evaluating the impact of extra monthly payments on total interest and payoff date Compound Interest Calculator - Free & Visual

Expert Tips

• ✻Look at the amortization schedule to see that early payments are mostly interest - this explains why extra principal payments early on save the most money.
• ✻Use the comparison feature to test different scenarios: higher down payment vs. lower rate, 15-year vs. 30-year, fixed vs. variable.
• ✻Always compare loans by APR rather than the nominal interest rate, since APR includes fees and reflects the true cost.

Frequently Asked Questions

How is the monthly payment calculated?→

The monthly payment is calculated using the standard amortization formula: M = P[r(1+r)^n]/[(1+r)^n-1], where P is the principal, r is the monthly interest rate, and n is the total number of payments. This produces equal monthly payments where the interest-to-principal ratio shifts gradually over the loan term.

Should I choose a 15-year or 30-year mortgage?→

A 15-year mortgage has higher monthly payments but saves significantly on total interest. On a $300,000 mortgage at 6.5%, the 15-year option costs about $2,613/month versus $1,896/month for 30 years, but saves over $200,000 in total interest. Choose based on your monthly budget and long-term financial goals.

How much can I save by making extra payments?→

Even small extra payments toward principal have a large impact. Paying $100 extra per month on a $300,000, 30-year mortgage at 6.5% saves about $64,000 in interest and pays off the loan 5 years early. Extra payments reduce the principal faster, which means less interest accrues in subsequent months.

What is APR and how is it different from interest rate?→

The Annual Percentage Rate (APR) includes the base interest rate plus origination fees, closing costs, and other charges, reflecting the true annual cost of borrowing. Two loans with the same interest rate but different fees will have different APRs. Always compare loans by APR for an accurate cost comparison.