Loan Payment Calculator
Know your monthly payment before you sign — mortgage, car, or personal loan. Compare rates and terms to see what the loan really costs.
Understanding your monthly payment
Every loan payment does two jobs: it pays the interest the bank charges on what you still owe, and it chips away at the debt itself (the principal). Because interest is charged on the remaining balance, the split changes over time — early payments are mostly interest, late payments are mostly principal. This schedule is called amortization.
Small rate differences, huge money
The same $300,000 loan at 6.0% instead of 6.5% costs $1,799/month — only $97 less. But over 30 years that half-percent saves about $35,000 in total interest. This is why shopping between lenders and negotiating your rate is the highest-paid hour of work most people will ever do.
15 years vs. 30 years
A 15-year term on that loan means a higher payment ($2,613 vs. $1,896) but total interest drops from $382,600 to $170,400 — you keep over $212,000. The 30-year term isn't wrong; it buys flexibility. A common middle path: take the 30-year, then pay extra toward principal when you can.
The formula behind the calculator
Where P is the loan amount, r the monthly rate (annual ÷ 12), and n the number of monthly payments. This is the standard amortization formula used by every bank.
Common questions
Should I make extra payments toward principal?
Extra principal payments skip the interest they would have generated for the rest of the term, so money paid early works hardest. On a fresh 30-year 6.5% loan, roughly every extra $1 paid in year one saves about $2 in interest later. Check that your lender applies extra payments to principal (not next month's payment) and has no prepayment penalty.
What's the difference between interest rate and APR?
The interest rate is what the lender charges on the balance. APR bundles in mandatory fees (origination, some closing costs), so it's slightly higher and better for comparing offers between lenders. This calculator uses the plain interest rate.
How much house can I afford?
A common guideline is that housing costs (payment + taxes + insurance) should stay under about a third of gross monthly income. Work backwards: set the slider to your rate, then adjust the loan amount until the payment lands where your budget allows — that's your comfortable price range, before the bank tells you their maximum (which is usually higher than what's comfortable).