Loan Payment Calculator — Monthly Payment & Total Interest
Calculate the monthly payment on any loan — plus total interest and the real cost of borrowing over the full term.
Last reviewed 2026-10-01. Rates change — verify against the official sources linked below before relying on these figures.
What this is based on
- Standard amortizing loan with fixed monthly payments (M = P·r(1+r)ⁿ ÷ ((1+r)ⁿ−1)).
- Origination fees, insurance and early-repayment penalties are not included — check your loan agreement for APR vs nominal rate.
The monthly payment is not the price of the loan
Lenders sell the monthly payment; the real price is total interest. A $25,000 loan at 8.5% for 5 years costs $513/month and $5,775 in interest — 23% on top of what you borrowed. Stretch that to 7 years and the payment drops to $396 but interest balloons to $8,300. You paid $117/month less per month and $2,500 more overall.
This is the core trade of loan shopping: monthly affordability versus total cost. The calculator shows both — optimize for the smallest total interest you can still afford monthly.
Small rate differences compound into real money
Two points on the rate matter more than they look. On $25,000 over 5 years, 6.5% vs 8.5% saves ~$1,300 in interest. On a $300,000 30-year mortgage, 6% vs 7% is a ~$71,000 difference — the price of a car, hidden inside 0.02 of an APR.
Paying extra: the asymmetric weapon
Extra principal payments attack interest directly — every dollar of principal removed stops accruing interest for the remaining term. Even $50/month extra on the loan above shortens it by months and saves hundreds in interest. Check for prepayment penalties first; most consumer loans don't have them, some business loans do.
Frequently asked questions
- How is a monthly loan payment calculated?
- M = P·r(1+r)ⁿ ÷ ((1+r)ⁿ−1), where P is principal, r is the monthly rate (annual ÷ 12), and n is the number of payments.
- Is it better to have a longer or shorter loan term?
- Shorter terms cost more per month but far less in total interest. Longer terms buy monthly affordability at a steep total-cost premium — pick the shortest term you can comfortably pay.
- What's the difference between interest rate and APR?
- The interest rate is the cost of the money; APR adds fees (origination, points, insurance) into an effective yearly cost — APR is the honest comparison number between lenders.
- Does paying a loan off early save money?
- Yes — you stop interest on the remaining principal. Check for prepayment penalties first; they're rare on consumer loans but exist.
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