Loan Calculator

Worked example

Example: a $20,000 principal at about 7% over five years often yields a payment near $395–$400/month with total interest commonly in the mid-thousands—verify with your lender’s exact rate and fees.

When to use this

• Estimating installment loans for personal, auto, or business borrowing.
• Seeing total interest before signing a fixed-rate term loan.
• Comparing two rate quotes on the same principal and term.
• Checking how shortening the term raises the monthly payment.

Common examples

• $20,000 personal loan at 7% for 5 years → payment near $396/month with about $3,760 total interest over 60 payments.
• $50,000 business loan at 8.5% for 7 years → payment near $792/month; total interest near $16,500—longer terms lower the monthly line item but raise lifetime cost.
• $12,000 used-car repair loan at 12% for 3 years → payment near $399/month for a shorter payoff when you want to clear debt quickly.
• $8,500 appliance financing at 11% for 24 months → payment near $395/month with moderate total interest.
• $100,000 business term loan at 9% for 10 years → illustrates how longer horizons lower monthly cost but raise lifetime interest.

Common mistakes

• Using simple interest mental math on an amortizing loan.
• Entering the full purchase price when a down payment already applies.
• Ignoring origination fees that increase the true amount borrowed.
• Assuming biweekly payments are the same as half a monthly payment without a schedule.

How it works

Uses the standard amortizing loan formula: monthly payment = P × r × (1+r)^n / ((1+r)^n − 1). Converts the annual interest rate to a monthly rate and the term into monthly payments, then estimates monthly payment, total interest, and total payment. Optional upfront fees are added into total cost (payment stream plus fees).

Limitations

Outputs are amortization estimates for fixed-rate loans. Balloon payments, variable rates, and lender-specific fees are excluded.

Privacy and file handling

Your data stays on your device and is not uploaded.

Accuracy & methodology

This section documents how the calculator works, what it leaves out, and when results were last reviewed. Figures are educational estimates—not professional advice—and are not labeled "current" unless tied to automatically updated reference data.

Formula source or methodology

Amortizing payment: M = P × [r(1+r)^n] / [(1+r)^n − 1] with monthly rate r and n payments.

Jurisdiction

General

Unit system

Currency; percent annual rate; term in months/years

Rounding method

Currency amounts round to two decimal places (half up via Math.round × 100 / 100).

Assumptions

• Fixed rate
• Equal monthly payments
• No extra payments

Known omissions

• Not tax, legal, investment, or lending advice. Confirm material decisions with qualified professionals.
• Origination fees, points, PMI/MIP, and lender-specific charges unless a field exists
• Property taxes, insurance, and HOA unless explicitly entered
• Prepayment penalties and variable or adjustable rates after the initial period
• Tax deductibility of interest

Test cases (automated)

• Positive principal and rate produce a finite monthly payment
• Zero principal is rejected

Version & last verified

Logic version 1.0. Content and formulas last verified 2026-07-24.

Important notice

Results are estimates for educational purposes and are not financial advice. Fees, insurance, and lender-specific terms may not be included. Consult a qualified financial professional for personal guidance.