Enter your loan amount, interest rate, and term to instantly calculate your monthly payment and see the full amortization breakdown — how much of each payment goes to principal versus interest over the life of the loan.
Monthly loan payments follow the standard amortization formula: M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1], where P is the principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments. This produces a fixed monthly payment where the interest portion shrinks and the principal portion grows with every payment.
Early payments are heavily interest-weighted. On a $20,000 loan at 7% over 5 years, your first payment of $396 splits roughly $117 to interest and $279 to principal. By the final payment, nearly all $396 reduces principal. This is why extra early payments have an outsized effect — they eliminate future interest charges on the reduced balance.
The total interest paid over the life of a loan is often surprising. That same $20,000 at 7% over 5 years costs $3,761 in interest — nearly 19% of the original amount borrowed. Extending the term to 7 years lowers the monthly payment but raises total interest paid to $5,362. The calculator shows both figures so you can make the trade-off deliberately.
What's the difference between interest rate and APR?
The interest rate is the base cost of borrowing. APR (Annual Percentage Rate) includes the interest rate plus fees — origination charges, closing costs, mortgage insurance — expressed as a single annual figure. Always compare APR to APR across lenders, not just the stated interest rate.
Does paying extra toward principal actually save money?
Yes — significantly. On a 5-year loan, an extra $50/month from the start reduces both the total interest paid and the payoff timeline. The savings compound because each extra dollar reduces the balance on which future interest is calculated. Even irregular lump-sum payments help.
What credit score do I need to get a good rate?
For personal loans, scores above 720 typically qualify for the best rates. Scores in the 660–720 range see moderate rates; below 620, options narrow and rates rise sharply. A 2% difference in rate on a $15,000 loan over 5 years is roughly $800 in additional interest.
Fixed or variable rate — which is better?
Fixed rates offer payment certainty for the full term. Variable rates start lower but reset periodically based on a benchmark index, so your payment can rise. For loans under 3 years, variable can make sense. For longer terms, the predictability of fixed is usually worth the slightly higher starting rate.