Free Loan Calculator - Calculate Monthly Payments & Total Interest
Calculate monthly loan payments, total interest, and payoff timelines based on principal, rate, and term.
Formula & Methodology
This is the standard amortization formula used universally by banks for personal loans, auto loans, and mortgages.
- PMT = (P × r) / (1 - (1 + r)^-n)
Worked Example
Using the Loan Calculator: apply the formula above to your input values. For instance, PMT = (P × r) / (1 - (1 + r)^-n). The tool performs each step instantly and shows the result.
Frequently Asked Questions
How is a loan payment calculated?
It uses the principal, interest rate and term in the standard amortization formula to produce a fixed monthly payment.
What is the total cost of a loan?
It is the principal plus all interest paid over the term, which this tool shows alongside your monthly payment.
Does a longer term reduce my payment?
Yes, but a longer term means more interest overall, so a lower payment can cost you more in total.