Loan Calculator
Calculate your monthly payment, total interest, and payoff timeline for any fixed-rate loan, then see exactly how extra payments cut years and thousands off the total cost.
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Enter your values above to see the results.
Tips & Notes
- ✓Compare loans by total interest paid, not monthly payment — a $50 lower payment can hide $3,000 in extra interest over the term.
- ✓Shop at least 3 lenders before accepting a rate — on a $30,000 loan, a 1.5% rate difference saves roughly $1,500 over 5 years.
- ✓Making even small extra principal payments early saves disproportionately more than the same payments made later due to compounding.
- ✓Shorter loan terms almost always carry lower interest rates — the savings compound in both directions simultaneously.
- ✓Check for prepayment penalties before signing — some lenders charge fees for early payoff that eliminate the benefit of extra payments.
- ✓Your debt-to-income ratio directly affects your rate — paying down existing debt before applying often qualifies you for meaningfully better terms.
Common Mistakes
- ✗Choosing the longest term to minimize monthly payment without calculating total interest — extending from 3 to 7 years on $20,000 adds $3,570 in interest.
- ✗Comparing loan offers by monthly payment instead of APR and total interest — lenders know this is how most borrowers shop.
- ✗Ignoring origination fees — a loan at 7% with a 2% origination fee has an effective APR closer to 8.5% over a 5-year term.
- ✗Confusing the nominal rate with APR — APR includes fees and gives the true annual cost, which is always higher than the stated rate.
- ✗Not specifying that extra payments go to principal — some servicers apply them to future scheduled payments instead, providing no benefit.
- ✗Using the annual rate directly in manual calculations instead of dividing by 12 — this produces a completely wrong monthly payment figure.
Loan Calculator Overview
A loan calculator computes the fixed monthly payment needed to repay a borrowed amount at a given interest rate over a chosen term. What most borrowers never check is the total interest column — on a 5-year loan at 9%, you repay the principal plus 25% more in interest on top.
This calculator also shows the impact of extra monthly payments — one of the most powerful and underused levers available to any borrower.
What each field means:
- Loan Amount — the total amount you are borrowing
- Interest Rate — annual rate charged by the lender; shop at least 3 lenders before accepting any rate
- Loan Term — how many years to repay; shorter = higher payment but far less total interest
- Extra Monthly Payment — optional additional principal payment each month; even $50 extra saves significantly
What your results mean:
- Monthly Payment — fixed amount due each month for the full term
- Total Paid — monthly payment times number of payments; the real cost of the loan
- Total Interest — what the lender earns; compare this across loan offers, not just monthly payment
- Interest Saved / Time Saved — the benefit of your extra payment, calculated precisely
Example — $20,000 loan at 8.5% for 5 years:
Monthly payment: $410 Total paid: $24,600 Total interest: $4,600 (23% added to the loan amount) With $100 extra/month: saves $568 interest, pays off 8 months early With $200 extra/month: saves $967 interest, pays off 15 months early
EX: Same $20,000 — how term length changes the cost at 8.5% 3-year term: $631/month → total interest $2,722 5-year term: $410/month → total interest $4,600 (+$1,878) 7-year term: $313/month → total interest $6,292 (+$3,570) Lower monthly payment always means more total interest — never compare loans by payment alone.
Monthly payment by amount and rate (5-year term):
| Loan Amount | 7.0% | 9.0% | 12.0% |
|---|---|---|---|
| $10,000 | $198 | $207 | $222 |
| $20,000 | $396 | $415 | $445 |
| $30,000 | $594 | $622 | $667 |
| $50,000 | $990 | $1,037 | $1,112 |
Term comparison — $20,000 at 8.5%:
| Term | Monthly Payment | Total Interest |
|---|---|---|
| 3 years | $631 | $2,722 |
| 5 years | $410 | $4,600 |
| 7 years | $313 | $6,292 |
| 10 years | $248 | $9,760 |
The interest rate on a loan is not what you pay — it is the rate at which your unpaid balance compounds against you every single month. A $50,000 loan at 12% over 7 years costs $22,900 in interest — nearly half the original amount again. Comparing loans by monthly payment alone is exactly how lenders make longer terms look attractive; total interest paid is the only honest comparison.
Frequently Asked Questions
At 8% for 5 years: $507/month, total interest $5,420. At 8% for 3 years: $783/month, total interest $2,188. At 12% for 5 years: $556/month, total interest $8,360. The rate and term interact — a lower rate matters more on longer loans. Always compare both monthly payment and total interest when evaluating loan options, since focusing only on the monthly payment is how borrowers end up paying thousands more than necessary over the full term.
On a $25,000 loan over 5 years, a 1% rate difference costs roughly $660 in total interest. On a $100,000 loan over 7 years, the same 1% difference costs around $3,700. The impact grows significantly with loan size and term length. This is why improving your credit score before borrowing — which can shift your rate by 0.5-2% depending on your starting point — is one of the highest-return financial moves before taking on any significant debt.
Choose the shortest term whose monthly payment you can sustain comfortably with financial margin remaining. A 3-year loan at 8.5% on $20,000 costs $2,722 in interest; a 7-year term costs $6,292 — a $3,570 difference for the same loan. A practical approach: take the longer term for the lower required payment, but voluntarily pay the higher amount each month. This preserves flexibility while minimizing interest if income remains stable.
Extra payments reduce principal immediately, shrinking the amount that accrues interest the following month. On a 5-year $20,000 loan at 8.5%, adding $100 extra per month saves $568 in interest and cuts 8 months off the term. The earlier in the loan you make extra payments, the greater the compounding benefit. Always confirm with your servicer that extra payments go to principal only — some apply them to future scheduled payments, which provides no financial benefit.
Scores above 750 qualify for the best available rates. Scores between 700-749 typically add 0.5-1% to the rate. Scores between 650-699 can add 2-4%. Below 650, options narrow significantly. For a $25,000 personal loan, the difference between a 750 score at 7% and a 650 score at 14% is roughly $5,200 in total interest over 5 years. Spending 6 months improving credit before borrowing — paying down revolving balances, correcting report errors — often saves more than years of extra payments afterward.
A secured loan is backed by collateral such as your home or car. If you default, the lender can seize the asset. Because the lender has recourse, secured loans carry lower rates. An unsecured loan is backed only by your promise to repay — no asset is at risk, but the lender charges more for that risk, typically 2-5% higher than equivalent secured loans. For large amounts where interest savings are significant, secured loans often make financial sense. For smaller amounts or when you prefer not to risk an asset, unsecured loans preserve flexibility at a higher rate.