A loan calculator takes the guesswork out of borrowing money. Whether you are considering a personal loan to consolidate debt, an auto loan for a new car, or any other installment loan, knowing your real monthly payment and total cost before you sign is the difference between a smart financial decision and a regret-filled one.

Our loan calculator uses the same standard amortization formula that banks and credit unions use, giving you instant, accurate numbers. Enter the loan amount, interest rate, and term, and you will see the monthly payment, total interest paid, and total cost of the loan. Try different scenarios to find the term that best balances affordability with total cost.

How a loan payment is calculated

Loan payments use the amortization formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where M is the monthly payment, P is the loan principal, r is the monthly interest rate, and n is the total number of monthly payments. This formula ensures equal monthly payments throughout the loan, even though the split between interest and principal changes each month.

In the early payments, most of your money goes toward interest. As the loan balance shrinks, more of each payment chips away at the principal. By the end of the loan, almost all of each payment is going to principal. This is called amortization, and it is why paying extra early in a loan saves so much more interest than paying extra at the end.

Personal loans vs auto loans vs credit cards

Personal loans are unsecured installment loans, typically 1-7 years with rates from 6% to 36% depending on credit. They are popular for debt consolidation, home improvements, and major purchases. Because they are unsecured (no collateral), rates are higher than secured loans.

Auto loans are secured by the vehicle, which means lower rates — typically 4% to 10% for borrowers with good credit. Terms run 36 to 84 months, but longer terms mean dramatically more interest. A $25,000 car at 6% over 60 months costs $483/month and $3,991 in interest. The same loan over 84 months drops the payment to $365 but raises total interest to $5,659 — and you may end up owing more than the car is worth.

Credit cards are revolving credit with much higher rates (typically 18%-25%+) and minimum payments that can keep you in debt for decades. Always pay credit cards in full each month if possible. If you carry a balance, a personal loan to consolidate at a lower rate often saves substantial interest.

Tips to get a better loan rate

Check your credit score before applying. Lenders price loans heavily based on credit, and a 50-point improvement can save you thousands. Review your credit report for errors, pay down credit card balances, and avoid new credit applications in the months before applying.

Shop multiple lenders within a 14-day window. Credit scoring models treat multiple loan inquiries within 14 days as a single inquiry, so you can compare rates without damaging your credit. Get quotes from your bank, credit unions, and online lenders.

Choose the shortest term you can comfortably afford. A shorter loan has higher monthly payments but dramatically less total interest. A 36-month auto loan instead of 60 months can save thousands in interest, even though the monthly payment is higher.

How to use this calculator

1. Enter the loan amount you want to borrow.
2. Enter the annual interest rate offered by the lender.
3. Enter the loan term in months or years.
4. Click Calculate to see your monthly payment and total cost.
5. Try different rates and terms to find the best fit for your budget.

Frequently asked questions