Loan Payment Calculator
Work out the monthly payment on a car, personal or home loan, see how much of it is interest, and find out what paying a little extra each month would save you.
The yearly rate your lender quotes.
Anything extra goes straight at the balance and shortens the loan.
Principal and interest only. Taxes, insurance, fees and any early-repayment penalty are not included.
How to use this calculator
- Enter the amount you are borrowing — the price less any deposit or trade-in, plus any fees the lender is rolling into the loan.
- Enter the annual interest rate. Use the rate your lender quotes; if you only have the APR, that works as a slightly conservative estimate.
- Pick the term. Tap one of the presets or type any number of years, including fractions like 0.5 for six months.
- Optionally add an extra monthly payment to see how many months it removes and how much interest it saves.
- Read the breakdown — the monthly payment, the total interest over the term, and how the very first payment splits between interest and principal.
The formula
A fixed-rate loan uses the standard amortisation formula, which finds the payment that clears the balance to exactly zero on the final month:
M = P × r ÷ (1 − (1 + r)^−n)
M = monthly payment
P = amount borrowed
r = annual rate ÷ 100 ÷ 12
n = number of monthly payments
At a rate of zero the formula breaks down, and the answer is simply:
M = P ÷ n
Each month, the interest portion is charged on whatever is still owed:
interest this month = current balance × r
principal this month = M − interest this month
Total interest is the sum of every payment minus the amount borrowed. To find how long a larger payment takes to clear the loan, the same relationship is rearranged for n using logarithms — which is how the extra-payment saving is worked out.
Worked examples
A $25,000 car loan at 7% over 5 years
- Monthly rate: 7 ÷ 100 ÷ 12 = 0.0058333, over 60 payments
- Monthly payment: $495.03
- Total repaid: 495.03 × 60 = $29,701.80
- Total interest: $4,701.80
A $200,000 mortgage at 6% over 30 years
- Monthly payment: $1,199.10
- First payment: $1,000.00 interest and only $199.10 off the balance
- Total interest over 30 years: about $231,676 — more than the house
The same mortgage with $200 extra a month
Paying $1,399.10 instead of $1,199.10.
- The loan clears in about 23 years rather than 30
- Roughly $70,000 of interest never gets charged
- The saving comes from removing years of interest at the end of the term, which is why overpaying early is worth far more than overpaying late
Frequently asked questions
It covers principal and interest — the part of the payment that actually repays the loan. That is the whole payment on a typical car or personal loan.
For a mortgage it is only part of the story. Property tax, homeowners insurance, private mortgage insurance and any HOA fee are billed on top, which is why a lender's quoted monthly figure is usually higher than this one.
Interest is charged on the balance you still owe, and at the start that balance is the whole loan. On $200,000 at 6%, the first month's interest alone is $1,000 of an $1,199 payment, leaving under $200 to reduce the balance.
As the balance falls the interest portion falls with it, so later payments are mostly principal. That shift is what amortisation means.
Not quite. The interest rate is what accrues on the balance; the APR also folds in certain fees, so it is usually slightly higher and is the better number for comparing offers between lenders.
Enter the plain interest rate here if you know it. Using the APR instead gives a slightly conservative payment, which is no bad thing.
More than most people expect, because every extra dollar comes straight off the balance and stops accruing interest for the rest of the term. On a 30-year mortgage, an extra $200 a month typically clears the loan years early and saves tens of thousands in interest.
Use the optional extra payment field to see the effect on your own numbers. Check first that your lender applies overpayments to principal and charges no early-repayment penalty.
Common reasons: the lender is quoting APR rather than the nominal rate, rolling fees into the amount borrowed, adding tax and insurance to a mortgage payment, using a slightly different day-count convention, or quoting a rate that is not fixed for the whole term.
This calculator assumes a fixed rate and equal monthly payments throughout, which is the standard structure for car, personal and fixed-rate home loans.
The payment is simply the amount divided by the number of months, and the total interest is zero. The calculator handles that case separately, because the standard amortisation formula divides by the rate and cannot express it.
Zero-percent promotional finance often has conditions — a deferred-interest clause, for instance — so read the agreement rather than trusting the headline.