How it works

Our Loan Payment Calculator helps you quickly figure out your monthly payments for various loans, like car loans, personal loans, or student loans. Just enter the principal amount, interest rate, and loan term to see your estimated monthly payment, total interest, and the overall cost of the loan.

The Formula

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]
Where:
M = Monthly Payment
P = Principal Loan Amount
i = Monthly Interest Rate (Annual Rate / 12 / 100)
n = Total Number of Payments (Loan Term in Years * 12)

Worked Example

1. Example: Car Loan

   Imagine you're taking out a $25,000 car loan with an annual interest rate of 5% over 5 years. Using the calculator, you'd input: - Principal Amount: 25000 - Annual Interest Rate: 5 - Loan Term (Years): 5 The calculator would then show your monthly payment, the total amount you'll pay back, and the total interest charged over the loan's lifetime.

Tips, Assumptions & Limitations

• Always compare interest rates from different lenders to find the best deal.
• Making extra payments can significantly reduce the total interest paid and shorten your loan term.
• Understand if your loan has any prepayment penalties before paying it off early.