Loan Calculator
Calculate monthly loan payments and interest.
How to Do It Manually
Loan payments are calculated using the amortization formula, which spreads the loan balance and interest evenly across equal monthly payments.
Monthly Payment = P × [r(1+r)ⁿ] / [(1+r)ⁿ − 1] where P = principal, r = monthly rate, n = number of payments
- Convert the annual interest rate to a monthly rate: r = annual rate ÷ 12 ÷ 100.
- Determine n = loan term in months.
- Apply the formula to find the monthly payment.
Frequently Asked Questions
What is amortization?
Amortization spreads loan repayment into equal periodic payments. Early payments are mostly interest; later payments are mostly principal.
How is total interest calculated?
Total Interest = (Monthly Payment × n) − Principal.