Free loan calculator: monthly payment, total cost and total interest for any amount, rate and term. Instant results for car, personal and student loans.
The monthly loan payment formula is: M = P × r(1+r)^n / ((1+r)^n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12).
Example: $20,000 auto loan at 6% for 5 years: monthly rate = 0.06/12 = 0.005, n = 60 payments → monthly payment = $386.66. Total paid = $23,199. Total interest = $3,199.
Paying extra principal each month dramatically reduces total interest. On the example above, paying an extra $50/month saves $290 in interest and pays off the loan 5 months early. On larger loans and longer terms, the savings are even greater.
Each payment is split between interest and principal. Early payments are mostly interest; later payments are mostly principal. This is called amortization. Refinancing or making extra payments attacks the principal directly and reduces future interest charges.
Amortized loans — personal, auto, student — use the same formula as mortgages: a fixed payment covering interest on the outstanding balance plus enough principal to reach zero at term end. The payment is M = P × [r(1+r)^n] / [(1+r)^n − 1].
A $25,000 car loan at 8% over 60 months costs about $507 monthly, with total interest of roughly $5,415. Shortening to 48 months raises the payment to $610 but cuts interest to about $4,295.
What matters more, rate or term? Both — but long terms quietly multiply interest. A low payment over 84 months usually costs far more overall than a higher one over 48.
What is APR? The annual cost of the loan including most fees, letting you compare offers fairly.
Can I pay a loan off early? Usually yes, and it saves interest — check for prepayment penalties first.