Money calculators · Updated
Loan Payment Calculator
Get the monthly payment for any fixed-rate loan, the total interest over its life, and a year-by-year table of how each payment splits between interest and principal.
Use the loan’s interest rate, not a fee-inclusive APR. The amount should include any costs already financed into the loan; separate fees are otherwise excluded.
| Year | Payments | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $6,155.04 | $4,190.81 | $1,964.23 | $20,809.19 |
| 2 | $6,155.04 | $4,561.24 | $1,593.80 | $16,247.95 |
| 3 | $6,155.04 | $4,964.41 | $1,190.63 | $11,283.54 |
| 4 | $6,155.04 | $5,403.22 | $751.82 | $5,880.32 |
| 5 | $6,154.54 | $5,880.32 | $274.22 | $0.00 |
The amortization formula
payment = P × r ÷ (1 − (1 + r)^−n) P = amount, r = annual interest rate ÷ 12, n = months each month: interest = balance × r; principal = payment − interest; balance −= principal
This model uses a fixed interest rate and monthly periods, excluding fees and other charges. The regular payment is rounded upward to a cent, and the final payment is adjusted to the amount due. Total paid comes from the resulting schedule. Interest is kept at full precision until display; lender day-count, posting and rounding rules can produce different results.
Frequently asked questions
How is a loan payment calculated?
With the amortization formula: payment = P × r ÷ (1 − (1 + r)^−n), where P is the amount borrowed, r the monthly interest rate (annual interest rate ÷ 12) and n the number of months. Each payment covers that month's modeled interest first; the rest reduces principal.
What is the payment on a $25,000 loan?
At an 8.5% interest rate with a 60-month target the payment is $512.92 and total interest is $5,774.70. A 36-month term raises the payment but cuts interest sharply; try it above.
What is the difference between APR and interest rate?
APR includes the interest rate plus most lender fees expressed as a yearly rate, which is why it is the number the Truth in Lending Act requires lenders to disclose. Use the contractual interest rate here to estimate payments. Fee-inclusive APR is useful for comparing borrowing costs, but it is not interchangeable with the interest rate in this formula.
Does paying extra reduce total interest?
Yes. Extra principal shortens the term and every month it removes accrues no interest. The mortgage payoff calculator models extra payments; the same logic applies to any amortized loan without prepayment penalties.
Why does the table show more interest in year one?
Because the balance is largest at the start. As principal falls, the interest portion of the fixed payment falls too, and the principal portion rises, which is what amortization means.
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Sources and updates
Methods and figures reviewed on . Provider rates and terms can change; check the linked source and your own account terms.
This calculator gives estimates for information only and is not tax, legal or financial advice. Actual outcomes depend on the assumptions, timing, taxes, fees and terms that apply to you. See how we calculate.