Loan Payment Calculator
Estimate monthly payments and total borrowing costs for a fixed-rate installment loan.
- Free to use
- No account required
- Results shown instantly
The total amount you wish to borrow.
Annual interest rate (not APR).
Enter your loan details and click calculate to see your payment.
How Loan Payments Work
A fixed-rate installment loan is repaid in equal monthly payments that cover both interest and principal.
Each monthly payment stays the same over the life of the loan, but the portion going to interest falls while the portion going to principal rises as the balance shrinks.
Principal vs. Interest
Principal is the amount you borrowed. Interest is the cost of borrowing it. Early in the loan, more of each payment is interest; later, more is principal.
How Interest Rates Affect Loan Costs
A higher rate means more of each payment goes to interest, increasing both the monthly payment and the total cost of borrowing for the same principal and term.
How Loan Terms Affect Monthly Payments
A longer term spreads repayment over more months, lowering each payment but increasing total interest. A shorter term raises the monthly payment but reduces total interest.
What Is an Amortization Schedule?
An amortization schedule shows each payment broken into interest and principal, plus the remaining balance after every month. It reveals how the loan is paid down over time.
How Extra Payments Can Reduce Interest
Extra payments go straight to principal, lowering the balance and the interest that accrues on it afterward. This can shorten your loan and reduce total interest without changing your required payment.
Understanding Loan Origination Fees
An origination fee is a charge for processing the loan. It may be paid upfront or deducted from the loan proceeds, reducing the cash you receive. This calculator treats it separately from the financed principal.
Interest Rate vs. APR
The interest rate is the cost of borrowing the principal. APR may include certain fees and is not necessarily identical to the stated rate. This calculator shows the contractual interest rate, not APR.
Loan Calculator Methodology
How MoneyMetric HQ calculates fixed-rate loan payments.
Formula. Monthly P&I uses the standard amortization formula M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is principal, r is the monthly rate, and n is the number of payments. At 0% interest, M = P / n.
Monthly interest. Each month, interest = balance × (annual rate ÷ 12). Principal = scheduled payment − interest.
Final payment. The final payment is adjusted so the balance reaches exactly $0 and is never overpaid.
Extra payments. Extra amounts apply to principal each month, reducing future interest and shortening the term without changing the scheduled payment.
Fees. Origination fees are shown separately and are not added to financed principal. When deducted, net proceeds = loan amount − fee.
Rounding. MoneyMetric HQ performs calculations using full numerical precision internally and rounds values only for display.
See our full MoneyMetric HQ Methodology page for more.
Loan Calculation Example
An illustrative installment loan.
Loan Amount
$20,000
Interest Rate
8%
Term
60 months
At 8% over 60 months, the monthly principal-and-interest payment is approximately $405.53. Total interest and total payments are calculated by the engine from the full amortization schedule. This is an illustrative example, not a lending offer.
Loan Calculator FAQs
How do I calculate a monthly loan payment?
Enter the loan amount, interest rate, and term. The calculator applies the standard fixed-rate amortization formula to estimate your monthly principal-and-interest payment.
How does interest affect my payment?
A higher rate increases the interest portion of each payment, raising both the monthly payment and the total cost of borrowing for the same principal and term.
Does a longer term cost more?
A longer term lowers each monthly payment but typically increases total interest because the balance is repaid more slowly.
What is the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal. APR may include certain fees and can differ from the stated rate. This calculator shows the contractual rate, not APR.
Can extra payments reduce interest?
Yes. Extra payments go to principal, lowering the balance and the interest that accrues afterward, which can shorten the loan and reduce total interest.
What happens with a 0% interest loan?
At 0% interest there is no interest charge; the monthly payment is simply the principal divided by the number of months.
Are origination fees included?
You can enter an origination fee and choose whether it is paid upfront or deducted from proceeds. The fee is shown separately and is not added to the financed principal.
Does this calculator determine loan approval?
No. It estimates payments and costs based on the numbers you enter. It does not check credit or determine eligibility.
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MoneyMetric HQ calculators are provided for educational and informational purposes. Results are estimates and may differ from lender, loan-servicer or other financial calculations because of loan terms, payment timing, rounding, fees, taxes, insurance and other factors. MoneyMetric HQ does not provide personalized financial, investment, tax, legal or credit advice. See our Methodology, Financial Disclaimer, and Privacy Policy.