Loan Calculator

How Does the Loan Calculator Work?

Our loan calculator uses the standard amortization formula to compute your monthly payment. You simply enter three values: the loan amount (principal), the annual interest rate, and the loan term in years. The calculator instantly shows your monthly payment, total amount paid, and total interest cost.

• •Enter your loan amount in dollars
• •Add the annual interest rate as a percentage
• •Choose the loan term in years
• •Click calculate to see your monthly payment and total cost

Understanding the Loan Payment Formula

The monthly payment is calculated using the formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where M is the monthly payment, P is the principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of payments (years × 12).

For example, a $200,000 loan at 6% annual interest for 30 years results in a monthly payment of approximately $1,199.10, with a total cost of $431,676 — meaning you pay $231,676 in interest over the life of the loan.

Types of Loans

Understanding the different types of loans helps you choose the right one for your needs:

Tips to Save on Loan Interest

• •Make a larger down payment to reduce the principal amount
• •Choose a shorter loan term if you can afford higher monthly payments
• •Compare interest rates from multiple lenders before committing
• •Consider making extra payments toward the principal when possible
• •Maintain a good credit score to qualify for lower interest rates