Loan Calculator
Calculate monthly payments and total interest for any type of loan.
Updated
Understanding Loan Payments
Loan payments are calculated using the same amortization formula as mortgages. Each payment includes both principal and interest, with the proportion of interest decreasing over time as the balance drops.
Frequently Asked Questions
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal, while APR (annual percentage rate) also folds in fees and other charges — so APR is usually the better number for comparing offers.
How can I pay off a loan faster?
Make extra payments toward principal, switch to biweekly payments, or refinance to a shorter term. Check for prepayment penalties first.
Does a longer loan term save me money?
A longer term lowers the monthly payment but increases total interest paid, because the balance takes longer to shrink. Shorter terms cost more per month but far less overall.
What is loan principal?
The amount you actually borrowed, not counting interest. Each payment splits between interest owed for the period and reducing the principal.