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TheCalcUniverse

Loan Calculator

Calculate monthly payments, total interest, and total cost for any personal or business loan, or solve for how much you can borrow or how long payoff takes. Includes a full amortization schedule with extra payment savings.

✓ Tested formula & cited sources Checked against independent sources · Oct 22, 2026 Private: runs in your browser

Principal amount borrowed

Personal loans are often 24–60 months. Enter years or months using the toggle above.

Results

Monthly Payment

$489.15

Over 60 payments you'll pay $4,349.22 in interest — 15% of the $29,349.22 total. That is a relatively efficient cost of borrowing.

Total Interest Paid
$4,349.22
Total Cost of Loan (Principal + Interest)
$29,349.22
Interest as % of Total Cost
14.8%
Loan Term
5 years (60 payments)
Interest is 15% of total cost — ModerateLowModerateHigh0153060
The share of your payments that goes to interest rather than paying down what you borrowed. Lower is cheaper.
Your loan: how the total cost splits between what you borrowed and what it costs to borrow it.$29,349total cost
  • Principal$25,00085%
  • Interest$4,34915%

Your loan: how the total cost splits between what you borrowed and what it costs to borrow it.

The formula

Payment: M = P × [r(1+r)^n] / [(1+r)^n − 1] | Loan amount: P = M × [(1+r)^n − 1] / [r(1+r)^n] | Term: n = −ln(1 − rP/M) / ln(1+r)

M
Monthly Payment
Principal & Term
Loan Amount & Duration
r
Monthly Rate

Worked example — Loan Amount 25000, Monthly Payment 500, Annual Interest Rate (APR) 6.5 %, Loan Term 5

Monthly Payment = $489.15

Full explanation ↓

How Loan Calculator Works

Payment: M = P × [r(1+r)^n] / [(1+r)^n − 1] | Loan amount: P = M × [(1+r)^n − 1] / [r(1+r)^n] | Term: n = −ln(1 − rP/M) / ln(1+r)

Monthly payment is calculated using the standard loan amortization formula — the same math used for auto loans, personal loans, and mortgages. This formula ensures each payment is exactly the same amount throughout the life of the loan, with the proportion allocated to interest decreasing over time as the principal balance shrinks. The same equation can be rearranged to solve for the loan amount you can afford at a given payment, or for the number of payments needed to clear a loan at a given payment.

M
Monthly Payment — The fixed amount paid each month toward both principal and interest. This amount stays constant for the entire loan term, but the split between principal and interest changes with each payment.
Principal & Term
Loan Amount & Duration — The principal (P) is the total borrowed; the term (n) is the duration in months. A 5-year $20,000 loan has P=$20,000 and n=60. Together these determine the payment amount and total interest cost.
r
Monthly Rate — The annual interest rate divided by 12. This periodic rate is applied to the outstanding balance each month to calculate the interest portion of the payment.
Illustration only (a long-term loan): principal vs. interest over the full term. Your own split is shown in the donut above.

Understanding the Result

Every loan payment is split between interest and principal repayment. Early in the loan term, most of each payment goes toward interest because the outstanding balance is largest. Over time, as the principal shrinks, less interest accrues and more of each payment goes toward reducing the balance. This is called amortization. The amortization schedule below shows exactly how each payment is allocated month by month and year by year. Use it to understand the true cost of your loan, see how much interest you will pay over the full term, and experiment with extra payments to see how much you could save by paying off the loan early.

If you start from a budget rather than a loan size, switch the calculator to "Loan amount" to see how much a given monthly payment can borrow, or to "Loan term" to see how long a loan lasts at that payment. A payment that only covers the monthly interest never pays the loan off, and the term mode warns you when that is the case.

How to Use

  1. Choose what to calculate: the monthly payment (default), the loan amount you can afford, or how long a loan takes to pay off.
  2. Monthly payment: enter the loan amount, annual interest rate (APR), and choose between years or months for the term.
  3. Enter the term duration and review your monthly payment, total interest, and total cost.
  4. Scroll down to view the full amortization schedule showing each payment split month by month.
  5. Loan amount: enter the monthly payment you can afford, the rate and the term. The "+$50/month" line shows how much extra borrowing power a small increase gives you.
  6. Loan term: enter the loan amount, your monthly payment and the rate to see how many payments it takes. The last payment may be smaller than the others.

Quick Reference

$25,000 at 6.5% APR, 3 years (36 payments)$766.23/mo · interest $2,584 · total $27,584
$25,000 at 6.5% APR, 5 years (60 payments)$489.15/mo · interest $4,349 · total $29,349
$25,000 at 6.5% APR, 7 years (84 payments)$371.24/mo · interest $6,184 · total $31,184
$25,000 at 6.5% APR, 10 years (120 payments)$283.87/mo · interest $9,064 · total $34,064

Frequently Asked Questions

What is the difference between interest rate and APR?
The interest rate is the base cost of borrowing the principal amount. APR (Annual Percentage Rate) includes fees like origination charges, points, and certain closing costs, so it better represents the true annual cost of the loan. When comparing loan offers from different lenders, always compare APRs rather than just interest rates, as two loans with the same rate but different fees can have meaningfully different total costs.
Should I choose a shorter or longer loan term?
Shorter terms have higher monthly payments but dramatically lower total interest because the principal is paid down faster and less time passes for interest to accrue. Longer terms have lower monthly payments but you pay far more in interest overall. For example, a $20,000 personal loan at 8% for 3 years costs about $2,560 in interest, while the same loan over 5 years costs about $4,300. Choose the shortest term you can comfortably afford.
How does an extra payment affect my loan?
Extra payments go directly to principal reduction, shortening your loan term and reducing total interest. Even $50 extra per month on a 5-year $20,000 loan at 8% saves about $590 in interest and pays the loan off about 7 months early (53 payments instead of 60). Use the Extra Payment feature available in the amortization schedule section below to model different scenarios.
What is a typical personal loan interest rate?
Personal loan rates range from 6-36% depending on your credit score, income, and the lender. Borrowers with excellent credit (760+) may qualify for rates as low as 6-12%. Those with average credit typically see rates of 15-25%. Borrowers with challenged credit may face rates above 30%. It is always wise to compare offers from at least three lenders before committing.
What is amortization and why does it matter?
Amortization is the process of spreading out a loan into fixed payments over time. Early payments are mostly interest because the outstanding balance is largest. Over time, as principal shrinks, more of each payment goes toward the balance. On a 30-year mortgage at 6.5%, about 85% of the first year's payments go to interest and about 15% to principal. Understanding amortization shows why extra payments early in the loan term save the most money.
How much can I afford to borrow at $500 a month?
Switch the calculator to "Loan amount," enter $500 as the monthly payment, your expected APR and the term. At 7% APR, $500 a month supports about $16,200 over 3 years, $25,250 over 5 years and $33,100 over 7 years. A longer term raises how much you can borrow but costs more interest in total.
How much more can I borrow if I add $50 to my monthly payment?
In "Loan amount" mode the calculator shows a "+$50/month" line. At 7% APR over 60 months, $500 a month supports about $25,250 and $550 a month about $27,800, roughly $2,500 more. Over 72 months at the same rate, $500 supports about $29,300 and $550 about $32,300.
I know the loan amount and my payment. How long will it take to pay off?
Switch to "Loan term" and enter the loan amount, the monthly payment and the rate. The calculator solves n = −ln(1 − rP/M) / ln(1+r) and rounds up to whole payments; the final payment is usually smaller than the rest. For example, $25,000 at 7% with a $545 payment takes 54 payments (4 years and 6 months).
What happens if my payment only covers the interest?
If the monthly payment equals the monthly interest (loan amount times the monthly rate), none of it reduces the balance and the loan never ends. On $25,000 at 7% that floor is about $145.83 a month. The "Loan term" mode shows this minimum and warns you when your payment is at or below it. Credit card minimum payments can sit close to this level.
What is the best way to compare a car loan with a mortgage?
Car loans are short and the car loses value quickly, so a shorter term is usually better: a $35,000 loan at 7% costs $838 a month over 48 months with $5,230 in interest, against $597 a month over 72 months with $7,963 in interest, about $2,734 more. A mortgage is larger and longer: $250,000 at 6.5% costs about $2,178 a month over 15 years ($142,000 interest) against about $1,580 over 30 years ($318,900 interest), roughly $176,900 more interest for a payment about $598 a month lower. Choose by whether monthly cash flow or total cost matters more to you.

Common Uses

  • •Work backwards from a budget: enter the payment you can afford and see how much you can borrow. At 7% APR, $600/month supports about $30,300 over 5 years or about $35,200 over 6 years.
  • •See how long a loan takes to pay off at your current payment, and what a slightly higher payment saves: $25,000 at 7% takes 61 payments at $495 but 54 at $545.
  • •Compare monthly payments across different loan terms to find the best balance between affordable payments and total interest cost.
  • •Calculate the true total cost of a loan including all principal and interest payments over the full amortization period.
  • •Experiment with extra payments to see how much interest you can save and how early you can become debt-free.

Sources

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Cite this calculator

TheCalcUniverse. "Loan Calculator — Monthly Payments, APR & Amortization." TheCalcUniverse, 2026, https://thecalcuniverse.com/finance/loan-calculator/. Accessed October 25, 2026.

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