Repayment Calculator

How Repayment Calculator Works

M = P × [r(1+r)^n] / [(1+r)^n − 1]

M

Monthly Payment — The fixed amount paid each month toward principal and interest. This amount stays constant over the life of a standard amortizing loan.

Principal & Term

Loan Amount & Duration — The principal (P) is the total borrowed; the term (n) is the duration in months. A 5-year $25,000 loan has P=$25,000 and n=60. Together these determine the payment and total interest cost.

r

Monthly Rate — Annual interest rate divided by 12. Even small differences in r compound dramatically over the life of a loan.

How to Use

1. Enter the total loan amount (principal) and the annual interest rate (APR) from your lender.
2. Choose whether your loan term is in years or months, and optionally enter an extra monthly payment to see how much time and interest you can save.
3. Scroll down for the full amortization schedule showing every payment month by month.

Common Uses

• •Calculate the monthly payment for any loan amount, interest rate, and term to see the full amortization schedule month by month.
• •See how extra payments reduce your total loan cost and shorten the repayment period for mortgages, auto loans, or personal loans.
• •Understand the true cost of borrowing by viewing how much of each payment goes toward interest versus principal over time.

Understanding the Result

Frequently Asked Questions

How does an extra payment save me money?

Extra payments go directly to reducing the principal balance. Since interest is calculated on the remaining balance, a lower principal means less interest accrues each month. Even $25 extra per month on a $25,000 loan at 7% can save over $1,000 in interest and shave months off your loan term. The earlier you start making extra payments, the greater the impact because you reduce the principal before more interest has a chance to accrue on it.

Should I make extra payments or invest instead?

If your loan APR exceeds your expected investment returns (which it almost certainly does for most consumer debt), paying down the loan is the better financial move. A guaranteed 7% return by avoiding interest beats the stock market's historical average of ~10% when accounting for taxes and volatility. The one exception is if you don't have an emergency fund — prioritize 3-6 months of expenses first before making extra loan payments. Another exception: if your loan has a very low rate (e.g., 3% mortgage), investing may yield higher returns.

Are there prepayment penalties on personal loans?

Most personal loans do not have prepayment penalties, unlike some mortgages. However, always check your loan agreement. Federal law prohibits prepayment penalties on most consumer loans under $75,000, but private lenders may structure fees differently. When in doubt, ask your lender specifically: "Is there any penalty for paying off this loan early?" If there is a penalty, calculate whether the interest savings still exceed the penalty amount.

Sources

• Consumer Financial Protection Bureau
• Investopedia