Loan Calculator

Calculate your monthly loan payments and total interest.

Calculator

Enter Your Loan Details

Enter the total amount you want to borrow.

Enter the annual interest rate as a percentage.

Enter the number of years for the loan term.

Table of Contents

1 Loan Payment Formula
2 How to Calculate Loan Payments
3 Types of Loans
4 Loan Calculator - Practical Examples
Concept

Loan Payment Formula

The loan payment formula calculates the fixed monthly payment required to pay off a loan with a fixed interest rate over a specified term.

Formula:
PMT = P × (r × (1 + r)^n) / ((1 + r)^n - 1)

Where:

  • PMT = Monthly payment
  • P = Principal loan amount
  • r = Monthly interest rate (annual rate / 12)
  • n = Total number of payments (years × 12)
Steps

How to Calculate Loan Payments

To calculate loan payments, follow these steps:

  1. 1
    Determine the principal loan amount (P)
  2. 2
    Convert the annual interest rate to monthly rate (r = annual rate / 12)
  3. 3
    Calculate the total number of payments (n = years × 12)
  4. 4
    Plug the values into the loan payment formula
Types

Types of Loans

Fixed-Rate Loans

Interest rate remains constant throughout the loan term

Variable-Rate Loans

Interest rate can change based on market conditions

Amortized Loans

Regular payments that include both principal and interest

Interest-Only Loans

Payments cover only interest for a certain period

Examples

Loan Calculator - Practical Examples

Example 1 Home Mortgage

A $300,000 mortgage at 4% interest for 30 years.

Monthly Payment = $1,432.25

Example 2 Car Loan

A $25,000 car loan at 5% interest for 5 years.

Monthly Payment = $471.78

Example 3 Personal Loan

A $10,000 personal loan at 8% interest for 3 years.

Monthly Payment = $313.36

Tools

Financial Calculators

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