guide
How loan payments are calculated
Understand how principal, rate, and term set the payment.
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Free fixed-rate loan calculator
Loan calculator
Estimate a fixed-rate loan payment, inspect every month of amortization, and see how an optional extra payment could reduce interest and payoff time.
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Enter the loan details
02
Estimated monthly payment
Required principal and interest payment
Payment with extra
Estimated payoff
Total interest
Total paid
Interest saved
Time saved
Amount borrowedInterest
03
Monthly amortization schedule
Each payment first covers that month's interest. The remainder reduces principal. The last payment may be smaller.
| Month | Payment | Principal | Interest | Balance |
|---|
Understand the estimate
How this loan calculation works
The calculator models a fully amortizing loan with a fixed annual percentage rate and equal monthly payments. It converts APR to a monthly rate and uses payment = principal × rate / (1 − (1 + rate)^−months). At 0% interest, it divides the amount borrowed evenly across the term.
Interest is calculated on the remaining principal each month. Early payments generally contain more interest because the outstanding balance is larger. Optional extra payments are applied to principal in this estimate, shortening the payoff period and reducing later interest.
The estimate excludes origination fees, late fees, taxes, insurance, changing rates, daily interest, prepayment penalties, and lender-specific rounding or payment rules. Check your agreement to confirm that additional payments are applied to principal. See the Consumer Financial Protection Bureau's explanations of loan amortization and extra principal payments.
This tool is an educational estimate, not a loan offer or financial advice. Your entries remain in your browser and are excluded from analytics.
Worked example
Compare a loan with an extra payment
Enter a $25,000 loan, 7.5% APR, a 60-month term, and a $100 extra monthly payment. Compare the required payment with the planned payment, then inspect the estimated interest and time saved.
Try this example in the calculatorCommon questions
Frequently asked questions
What does the monthly payment include?
It includes estimated principal and interest for a fixed-rate, fully amortizing loan. It does not include taxes, insurance, fees, or other lender charges.
How do extra payments reduce interest?
In this model, the extra amount reduces principal. A smaller balance produces less interest in later months and can shorten the payoff period.
Is APR the same as the interest rate?
Not always. APR can include certain borrowing costs. This calculator treats the entered percentage as the fixed annual rate used to calculate monthly interest.
Why can the final payment be smaller?
The calculator caps the final payment at the remaining principal plus that month’s interest instead of collecting a full scheduled payment.
Does the schedule match every lender?
No. Lenders may use daily interest, different rounding, fees, payment dates, or rules for applying extra payments.