Loan Calculator
This loan calculator works for any fixed-rate instalment loan: a car loan, a personal loan or student loans. It gives the regular monthly payment and total interest. If you add an extra monthly amount, it also shows how many months earlier you finish and how much interest you avoid.
How to use the loan calculator
- Enter the loan amount, annual interest rate and the term in years.
- Optionally add an extra monthly payment to see the savings.
- Compare the totals with and without the extra payment.
Formula
Payment = L × i ÷ (1 − (1 + i)−n) with i the monthly rate and n the number of months. With extra payments, each month the interest is charged on the remaining balance and the extra reduces principal directly.
Worked examples
A five-year loan
$20,000 at 6% for 5 years costs $386.66 a month and $3,199.36 in interest.
Adding $100 a month
Paying $100 extra each month clears the same loan in 47 months instead of 60, saves about $755 in interest and finishes 13 months sooner.
Getting the most from a loan
What determines your payment
Three numbers matter: amount, rate and term. A longer term lowers the payment but raises total interest. On $20,000 at 6%, a 3-year loan costs about $608 a month and $1,908 in interest, while a 7-year loan costs about $292 a month and $4,519 in interest.
Ways to pay less interest
- Extra principal payments. Even a small regular extra amount shortens the loan.
- Bi-weekly payments. Paying half every two weeks makes 26 half-payments, equal to 13 full ones a year.
- Refinancing when rates fall, if fees do not cancel the saving.
- A shorter term if the higher payment fits your budget.
Questions to ask a lender
Is the rate fixed or variable? Is there an origination fee? Is there a prepayment penalty? How are extra payments applied? The answers can change the real cost by hundreds of dollars.
Debt payoff strategies
With several debts, the avalanche method pays the highest interest rate first to minimise cost, while the snowball method pays the smallest balance first for motivation. Either works better than only paying minimums.
Practice problems
Try these yourself first, then check your answer. The answers come from the calculator above.
- A $15,000 car loan at 7.5% over 4 years. What is the payment?
Show answer
Monthly payment: $362.68
- Same loan with $50 extra each month: how much sooner is it paid off?
Show answer
Monthly payment: $362.68
Common mistakes to avoid
- Assuming any extra payment is applied to principal. Check with your lender that extra payments are not treated as early payment of the next instalment.
- Ignoring fees, such as origination fees or prepayment penalties.
- Focusing only on the monthly payment instead of the total cost.
Frequently asked questions
How is a monthly loan payment calculated?
With the amortization formula above, which keeps the payment constant while the interest share shrinks over time.
Do extra payments really save money?
Yes. They reduce the balance that interest is charged on, so total interest falls and the loan ends sooner.
What is APR?
The annual percentage rate includes the interest rate plus certain fees. This tool uses the interest rate you enter.
Is this a quote?
No. It is an educational estimate; your lender’s figures are the ones that count.
Reviewed September 26, 2026 by the SolveCalcPro editorial team. Found a mistake? Tell us; see our editorial policy.