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Loan Payment Calculator
Find your monthly payment and total cost for any loan.
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Balance Over Time
How Loan Payments Are Calculated
Every loan payment is split between interest and principal. In the early months, most of your payment goes toward interest. Over time, as your balance decreases, more goes toward principal. This process is called amortization.
M = P × [r(1+r)^n] / [(1+r)^n − 1]
Where M = monthly payment, P = loan amount, r = monthly interest rate (annual ÷ 12), n = number of payments.
The Real Cost of a Loan
The interest rate alone doesn't tell the full story. On a $25,000 loan at 8% for 5 years, you pay $5,414 in interest — more than 21% of the original loan amount. At 15%, the interest jumps to $10,745. This is why comparing rates before borrowing is critical.
- APR vs interest rate: APR includes fees and gives the true cost of borrowing
- Loan term impact: Longer terms lower monthly payments but dramatically increase total interest
- Extra payments: Even $50–100 extra per month can cut years off your loan
Common Loan Types and Rates (2026)
- Personal loans: 8–24% APR depending on credit score
- Auto loans: 5–12% APR (new), 8–18% APR (used)
- Student loans: 5–8% federal, 4–15% private
- Credit cards: 18–29% APR — avoid carrying balances
- Home equity loans: 7–10% APR
Frequently Asked Questions
What is a good interest rate for a personal loan?
A rate below 10% is generally considered good for a personal loan. If your credit score is above 720, you may qualify for rates as low as 6–8%. Rates above 20% should be avoided if possible — consider building credit first or exploring alternatives.
Is it worth making extra loan payments?
Almost always yes. Extra payments go directly toward principal, reducing the balance on which future interest is calculated. On a $25,000 loan at 10% for 60 months, an extra $100/month saves about $1,600 in interest and pays off the loan 10 months early.
What happens if I miss a loan payment?
Missing a payment triggers a late fee (typically $25–50) and can be reported to credit bureaus after 30 days, hurting your credit score. After 90+ days, the loan may go to collections. Contact your lender immediately if you anticipate trouble — many offer hardship deferment options.
Should I pay off a loan early?
Usually yes — unless your loan has a prepayment penalty (check your contract), or you could earn more by investing the extra money. If your loan rate is 8% and your investments return 10%, investing the extra makes mathematical sense. But paying off debt is risk-free and has emotional value too.