CalcEmperor

Loan payment calculator

Work out the monthly payment and the total interest on a fixed-rate loan, then see how the balance falls year by year.

How the loan payment is calculated

Most car loans, personal loans and student loans are fixed-rate installment loans: you pay the same amount every month until the balance reaches zero. The payment comes from a standard formula:

Payment = P × r ÷ (1 − (1 + r)−n)
P = amount borrowed   r = APR ÷ 12   n = number of monthly payments

If the rate is 0%, the formula simplifies to the amount divided by the number of months. The calculator applies exactly this formula and then walks through each month to split every payment into interest and principal.

Worked example

Borrow $25,000 at 7% APR for 5 years. The monthly rate is 0.07 ÷ 12 = 0.005833 and there are 60 payments, so the payment is about $495. Over the full term you pay roughly $29,700, of which about $4,700 is interest.

Why the term matters so much

Stretch that same loan to 7 years and the monthly payment drops, but you pay interest for longer. Go the other way and shorten it to 3 years: the payment rises to about $772, yet total interest falls to about $2,800, which is roughly $1,900 less than the 5-year version. A lower payment feels easier, but a longer term almost always costs more overall.

APR versus interest rate

The interest rate is the cost of borrowing the money. The APR (annual percentage rate) also folds in certain lender fees, which makes it the better number for comparing offers. This calculator treats the rate you enter as the APR with equal monthly payments. Your lender's official figures can differ slightly because of fees, payment dates and rounding, so use this as a close estimate and check the loan disclosure for the exact numbers.

Ways to pay less interest

  • Choose the shortest term you can afford. Interest is charged on the outstanding balance, so a faster payoff means less of it.
  • Make extra principal payments. Even small extra amounts shorten the loan. Check first that your loan has no prepayment penalty and that extra money is applied to principal.
  • Improve your credit before you apply. A lower APR is the single biggest lever on the total cost.
  • Refinance if rates fall. Compare the new loan's APR and fees against what you would save.

Reading the yearly table

In the early years most of each payment goes to interest because the balance is still high. As the balance shrinks, more of every payment reduces principal. That is why extra payments made early in a loan save the most.

Last updated September 19, 2026.

Frequently asked questions

How do I calculate a monthly loan payment?

Divide the APR by 12 to get the monthly rate, then use Payment = P × r ÷ (1 − (1 + r)^−n), where P is the amount borrowed and n is the number of monthly payments. This calculator does it for you.

Does this calculator include fees?

No. It assumes the rate you enter is the APR and that payments are equal and monthly. Origination fees, insurance or other charges are not added separately.

Can I use it for a car loan, personal loan or student loan?

Yes, as long as the loan has a fixed rate and equal monthly payments. It does not model variable rates, interest-only periods or balloon payments.

Is a shorter loan term better?

A shorter term means a higher monthly payment but much less total interest. The best choice is the shortest term whose payment fits comfortably in your budget.

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