Loan Payment Calculator — See Your Monthly Payment Instantly

How Payment Calculator Works

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

This calculator works in all three directions — given any two of (payment, loan amount, term), it solves for the third. All three use the same amortization math, rearranged algebraically. The monthly payment formula is the standard loan amortization formula widely used in mortgages, auto loans, and personal lending. The loan amount formula reverses it to solve for how much you qualify for. The term formula uses natural logarithms to find the exact number of payments needed.

M

Monthly Payment — The fixed amount paid each month, covering both principal and interest portions. The payment amount is constant for the life of the loan under standard amortization.

Principal & Term

Amount Borrowed & Duration — The principal is the total loan amount; the term (n) is the full duration in months. A 5-year $25,000 loan has P=$25,000 and n=60. These together define the payment: larger principal or shorter term means higher payments.

r

Monthly Rate — The annual APR divided by 12 to get the periodic rate. Even a small change in r significantly affects the monthly payment — a 1% APR difference on a $25,000 loan changes the monthly payment by roughly $12-15.

How to Use

1. Select what you want to calculate from the dropdown.
2. Calculate Monthly Payment: enter loan amount, interest rate, and term.
3. Calculate Loan Amount: enter what you can afford per month, interest rate, and term.
4. Calculate Loan Term: enter loan amount, monthly payment, and interest rate.
5. Leave the field you are solving for blank — the calculator fills it in.
6. Use the "+$50/month" result in Loan Amount mode to see how much extra borrowing power a small payment increase gives you.

Common Uses

• •Determine how large a loan you can afford by entering your target monthly payment, interest rate, and desired loan term — see how much house or car you can qualify for before shopping.
• •Compare loan scenarios side by side: a $30,000 car loan at 6% for 60 months ($580/month) vs 72 months ($498/month) — lower payment but $1,200 more in interest.
• •Find out how long it will take to pay off a loan at your current monthly payment amount including accrued interest, plus see how adding just $50/month accelerates your payoff.
• •See the true cost of extending your mortgage term: a $200,000 mortgage at 6.5% costs $1,264/month for 30 years ($255,000 interest) vs $1,811/month for 15 years ($126,000 interest) — save $129,000 by choosing 15 years if you can afford the payment.
• •Use the Calculate Loan Amount mode to reverse-engineer your borrowing power: if you can afford $600/month and qualify for 7% APR over 60 months, you can borrow approximately $30,300 — but at 72 months, ~$35,000.
• •Credit card debt analysis: see how long it takes to pay off revolving credit card debt at minimum payments, and compare the impact of increasing your payment to a fixed amount each month.

Understanding the Result

This is the "solve for X" loan calculator. Most people know their budget (monthly payment) and want to know how large a loan they can afford. Others know the loan amount and want to find out how long it will take to pay it off at their current payment. All three calculations use the same amortization equation, just rearranged algebraically. The minimum payment warning shows the point at which your payment only covers interest and the balance never decreases — a critical threshold to understand, especially for credit card debt where minimum payments are often set just above this level. Understanding the relationship between these three variables — loan amount, payment, and term — is the foundation of smart borrowing. A $50 increase in monthly payment on a $25,000 loan at 7% APR shortens the term from 60 months to about 49 months and saves over $1,000 in total interest.

Frequently Asked Questions

How much can I afford to borrow at $500/month?

Select "Calculate Loan Amount," enter $500 as your monthly payment, your expected APR, and desired term. For example, at 7% APR over 5 years: $500/month = ~$25,200 loan. Over 3 years: ~$16,300. Over 7 years: ~$32,700. A longer term increases borrowing power but costs more in total interest.

What happens if my payment only covers the interest?

If your monthly payment equals the monthly interest charge, no principal is ever paid down and the loan never ends. This is sometimes called an "interest-only" payment. The calculator shows your minimum interest-covering payment so you know the floor beneath which you would never make progress. Credit card minimum payments are often dangerously close to this threshold.

I know the loan amount and payment — how long will it take?

Select "Calculate Loan Term," enter your loan amount and monthly payment. The formula n = −ln(1 − rP/M) / ln(1+r) solves for the exact number of payments using natural logarithms. This is mathematically precise and accounts for the declining balance effect where each successive payment has a larger principal portion and smaller interest portion.

How does increasing my monthly payment affect my loan term?

Extra payments reduce principal faster, which reduces future interest charges, creating a virtuous cycle that shortens the loan significantly. Even small increases have an outsized effect — adding $25/month to a $500 payment on a 5-year loan can save months of payments and hundreds in interest. The earlier in the loan term you make extra payments, the greater the impact because the principal is highest at the beginning.

Should I choose a shorter or longer loan term?

Shorter terms have higher monthly payments but much less total interest. Longer terms have lower payments but cost significantly more over time. For a $25,000 loan at 7%: a 3-year term costs $772/month with $2,781 total interest; a 5-year term costs $495/month with $4,700 total interest. Choose the shortest term you can comfortably afford.

What is the best strategy for paying off a car loan vs a mortgage?

For car loans (typically $20K-$50K over 3-7 years at 5-9% APR): a shorter term is almost always better because cars depreciate rapidly. A $35,000 car loan at 7% over 48 months costs $838/month with $5,224 total interest vs 72 months at $596/month with $7,911 total interest — the extra 2 years costs $2,687 more in interest. For mortgages ($150K-$500K+ over 15-30 years at 6-7% APR): a 15-year term saves dramatically on interest but requires a much higher payment. A $250,000 mortgage at 6.5% costs $1,896/month for 15 years ($91,280 total interest) vs $1,580/month for 30 years ($318,800 total interest). The 30-year term costs $227,520 more in interest. However, the 15-year payment is $316/month higher, so choose based on whether the cash flow or long-term savings matters more to you.

How much more can I borrow if I add $50 to my monthly payment?

Adding $50/month increases your borrowing power significantly more than $50 times the loan term because the extra payment reduces the interest burden. For example, at 7% APR over 60 months: $500/month gets you ~$25,200 while $550/month gets you ~$27,700 — that is $2,500 more borrowing power from just $50 extra per month. Over 72 months at the same rate: $500/month → ~$29,200, $550/month → ~$32,100. The calculator shows this as the "+$50/month" line in Loan Amount mode.

Sources

• Consumer Financial Protection Bureau
• Investopedia