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Loan Calculator

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First Payment

Your schedule and payoff date count from this month.

Total Cost: $30,056.96
Principal: $25,000.00
Interest: $5,056.96
Monthly Payment$500.95
Payoff DateOctober 2031
Consider paying an extra . You could save $564.51 in interest and pay off your loan 6 months sooner.

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Estimates for informational purposes only — not financial advice.

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Understanding Simple Loans

A simple loan, also known as a personal or installment loan, is a straightforward financial product where you borrow a set amount of money and pay it back in regular, fixed payments over a specific period. These loans are commonly used for debt consolidation, home improvements, or other large one-time expenses. Our calculator helps you understand how the loan amount, interest rate, and loan term affect your monthly payment and the total cost of the loan. Financing a car? The auto loan calculator adds your trade-in, sales tax and fees.

How this calculator works

Works out the fixed payment that repays a loan over its term, the total interest, and a payment-by-payment schedule, including how extra payments shorten the loan.

How it calculates

  1. Turns the yearly rate into a rate per payment. With monthly compounding and monthly payments, that is the rate ÷ 12. Other choices go through the effective yearly rate, (1 + rate ÷ n)^n − 1 for n compounding periods a year, then the matching rate for 12, 26 or 52 payments a year.
  2. Finds the level payment with the standard amortization formula: payment = loan × r ÷ (1 − (1 + r)^−N), where r is the rate per payment and N the number of payments. At 0%, it is simply the loan ÷ N.
  3. Builds the schedule one payment at a time: interest is the balance × r, the rest of the payment reduces the balance, and any extra payment goes straight to principal.
  4. Stops when the balance reaches zero. The last payment is only what is still owed, and interest saved compares the schedule with and without your extra payments.
  5. Solving for the loan amount turns the formula around: loan = payment × (1 − (1 + r)^−N) ÷ r, rounded down to the cent. Solving for the term counts the payments, N = −ln(1 − r × loan ÷ payment) ÷ ln(1 + r), then builds the schedule for the exact number and the smaller last payment. A payment that doesn't cover the first month's interest never repays the loan, and the calculator says so.

What it assumes

  • A fixed rate for the whole term, with every payment made in full and on time.
  • No fees, insurance or prepayment penalties. Check your loan agreement for those.
  • Bi-Weekly and Weekly split the same loan into 26 or 52 payments a year over the same term. The "accelerated" bi-weekly plan is different; to model it, keep Monthly and add an extra payment of one-twelfth of your payment.
  • Amounts are rounded for display, so a lender's figures can differ by a few cents a payment.

Sources

Copy and figures last reviewed .

How we build and check all our calculators

Frequently Asked Questions

Does paying extra principal reduce my monthly payment or my loan term?

On a fixed-rate installment loan, extra principal payments shorten your loan term — your required monthly payment stays the same. Because every extra dollar goes straight to the balance, less interest accrues in every month that follows, so the loan ends early and the total interest drops. If you want a lower monthly payment instead, you would need to refinance or recast the loan.

How is my monthly loan payment calculated?

Lenders use the standard amortization formula: the loan amount multiplied by the periodic interest rate, divided by one minus (1 + rate) raised to the negative number of payments. In practice that produces a fixed payment sized so that, after the final payment, the balance lands exactly at zero. This calculator uses the same formula, adjusted for your compounding and payment frequency.

Why does so much of my early payment go to interest?

Each payment first covers the interest accrued on your remaining balance, and only the remainder reduces principal. Early in the loan the balance is at its largest, so the interest slice is at its largest too. As the balance falls, the interest portion shrinks and an ever-growing share of the same fixed payment goes to principal — you can watch this crossover happen in the amortization schedule.

Do bi-weekly payments really pay a loan off faster?

The accelerated kind does. Paying half your monthly amount every two weeks produces 26 half-payments a year, the equivalent of 13 monthly payments instead of 12, so you make a full extra payment every year, and that can cut years off a long loan. This calculator's Bi-Weekly option is the other kind: the same loan split into 26 payments a year over the same term, which ends on the same date. To see the accelerated effect, keep Monthly and add a recurring extra of one-twelfth of your payment.

Does compounding frequency change what I pay?

Slightly. The more often interest compounds — daily versus monthly versus annually — the higher the effective annual rate for the same stated rate, which nudges your payment and total interest up. The difference is usually small, but it is why two loans with identical quoted rates can cost different amounts. This calculator lets you set the compounding frequency to match your loan agreement.

Should I choose a shorter or longer loan term?

A longer term lowers the monthly payment but raises the total interest, because the balance is outstanding — and accruing interest — for more months. A shorter term does the opposite: higher payments, much less total interest. A practical middle path is taking the longer term for flexibility and then making extra principal payments when you can, which this calculator lets you model directly.

Term Definitions

Solve For

Choose Payment to see the payment for a loan amount and term. Choose Loan amount to enter the payment you can afford and see how much it lets you borrow over the term. Choose Term to enter a payment and see how long it takes to repay the loan, including the smaller final payment.

Loan Amount

This is the principal amount of the loan. It is the total amount of money you borrow from a lender and are obligated to pay back, excluding any interest.

Payment

The regular payment you can make, on the payment schedule you chose. Solving for the loan amount, it is the payment you can afford, and the calculator works out what it repays over the term. Solving for the term, it is the payment you will make, and it has to be more than the first month's interest, or the balance never goes down.

Interest Rate

The interest rate is the percentage of the principal that a lender charges for borrowing money. It is typically expressed as an annual rate. A lower interest rate will result in lower monthly payments and less total interest paid over the life of the loan.

Loan Term (Years)

The loan term is the duration over which the loan is scheduled to be repaid. Common loan terms are 15 or 30 years for mortgages, or 3-7 years for personal or auto loans. A longer term usually means lower monthly payments but more total interest paid.

Extra Monthly Payment

Making an extra payment each month, in addition to your required monthly payment, can significantly reduce your loan's total cost. This extra amount is applied directly to the principal, which helps you pay off the loan sooner and save on interest.

Compounding

Compounding frequency determines how often the interest is calculated and added to your loan's principal. More frequent compounding (e.g., daily) means you'll pay slightly more interest over the life of the loan compared to less frequent compounding (e.g., annually).

Payment Frequency

Payment frequency is how often you make payments. Here, Bi-Weekly and Weekly spread the same loan over 26 or 52 smaller payments a year for the same term, so the loan ends on the same date at slightly lower interest. The popular "accelerated" bi-weekly plan is different: it pays half the monthly payment every two weeks, which adds up to 13 monthly payments a year. To model it, keep Monthly and add a recurring extra of one-twelfth of your monthly payment.

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