Loan Calculator
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Loan Terms
Monthly Payment
Lifetime Breakdown
Amortization Schedule
Breakdown of principal and interest reduction for each period.
| Period | Interest | Principal | Ending Balance |
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Understanding Amortized Loans
Whether it's a personal loan, a piece of equipment, or a family loan you're formalizing, most fixed-rate installment loans work the same way under the hood: a level monthly payment that blends principal and interest, recalculated fresh every period against a shrinking balance. This calculator lets you model that math for any generic loan, independent of what it's for.
The Amortization Formula
Every fixed-rate loan payment is derived from the same annuity formula: it solves for the level payment that fully retires the principal, plus all accrued interest, over the exact number of periods you specify.
The Interest Curve
Early payments are interest-heavy because the balance is at its highest. As the balance shrinks, less of each payment goes to interest and more chips away at principal — the curve accelerates toward the end of the term.
Extra Payments
Any extra amount you pay each month is applied directly to the principal, which reduces the balance interest accrues against for every remaining period — shortening the loan and cutting total interest paid.
Comparing Loan Offers
When comparing two loan offers, don't just compare the monthly payment — a lower payment stretched over a longer term can cost far more in total interest. Compare total interest and total paid side by side.
Worked Example
Suppose you borrow $20,000 at an 8% annual rate for 60 months (5 years), with no extra payments:
- Monthly payment: approximately $405.53.
- Total paid over 5 years: approximately $24,331.62.
- Total interest: approximately $4,331.62 — over 21% of the original loan amount.
Where the Payment Goes
- Principal: $20,000.00
- Interest: $4,331.62
- Total Cost: $24,331.62
Fixed Rate vs. Variable Rate
This calculator assumes a fixed interest rate for the life of the loan, which is the most common and predictable structure for personal, auto, and most consumer installment loans. Variable-rate loans can change your payment over time as the underlying index rate moves, so treat any variable-rate estimate here as a snapshot at today's rate, not a guarantee for the full term.
A note on rounding: Lenders round to the cent every period, so the final payment in your real schedule may differ by a few cents from a purely theoretical calculation — this calculator mirrors that behavior in its amortization schedule.
Key Takeaways
- Total Interest Matters: Two loans with the same payment can carry very different total costs — always compare total interest, not just the monthly figure.
- Extra Payments Compound: Even a small extra monthly payment can shave months off your term and meaningfully cut total interest paid.
- Term Length Trade-off: A longer term lowers your monthly payment but increases total interest — use the amortization schedule to see the full trade-off.
- This Is the Generic Engine: The same math here powers our Student, Business, Personal, and Boat loan calculators — use whichever framing matches your situation.