Loan Calculator.

Guide

How to use the Loan Calculator

1. Start with the What do you want to find? selector. Pick Monthly payment if you know the loan and want the bill. Pick Loan amount if you know the payment you can live with and want to know how much it buys. Pick Loan term or Interest rate when someone has quoted you a payment and you want to check the deal behind it. The calculator hides the field it is solving for.
2. Enter the Loan amount: the money you actually borrow after any down payment, not the sticker price.
3. Enter the Interest rate (APR) as the yearly rate the lender quoted. The calculator divides it by 12.
4. Set the Loan term (years), and use the + months field beside it for any odd months. A 66-month offer goes in as 5 years and 6 months.
5. If you are solving for anything other than the payment, type the Monthly payment you were quoted or can afford.
6. Pick the First payment date so the payoff date and schedule match your calendar.
7. Read the headline number, then open the Payment schedule and switch it to Monthly. The interest-versus-principal split on each line tells you more about the loan than the payment does.

How the math works

A fixed-rate loan charges interest every month on whatever you still owe. The payment is sized so that the same amount, paid every month, covers that month's interest and zeroes the balance on the last payment. Early on, most of each payment is interest because the balance is large. As the balance falls, the interest share shrinks and the principal share grows, which is why the last few payments knock out far more debt than the first few.

The three reverse modes rearrange the same relationship. Loan amount asks what balance this payment stream pays off. Loan term asks how many payments of this size it takes. Interest rate has no clean formula, so the calculator tries rates between zero and absurd, narrowing in until the payment matches to the penny.

One trap it catches for you: if the payment is smaller than the first month's interest, the balance grows instead of shrinking, and the calculator says so plainly rather than pretending the loan ends someday.

Worked example

Borrow $20,000 at 8.0% for 5 years. The monthly rate is 0.08 ÷ 12 = 0.006667, and n is 60.

(1 + 0.006667)^−60 works out to about 0.6712, so the denominator is 1 − 0.6712 = 0.3288. The payment is 20,000 × 0.006667 ÷ 0.3288, which comes to $405.53; the calculator carries more decimals than are shown here.

Sixty payments of $405.53 total $24,331.67, so total interest is $4,331.67, about 22 cents for every dollar borrowed.

Look at the first payment: interest is 20,000 × 0.006667 = $133.33, so only $272.19 goes to principal and the balance drops to $19,727.81. By the last payment the interest is $2.69 and $402.84 goes to principal. Rolled up by year:

Loan year	Interest paid	Principal paid	Balance at year end
1	$1,477.53	$3,388.80	$16,611.20
2	$1,196.26	$3,670.07	$12,941.13
3	$891.65	$3,974.69	$8,966.44
4	$561.75	$4,304.58	$4,661.86
5	$204.47	$4,661.86	$0.00

About 62% of the total interest lands in the first two years, which matters if you plan to pay the loan off early or trade in whatever it financed.

The reverse modes agree with themselves. A $405.53 payment at 8% for 60 months solves to a loan of about $20,000; a $20,000 loan with a $405.53 payment at 8% solves to 60 months; and $20,000 paid as $405.53 for 60 months solves to 8.0% APR.

Term and rate: which one costs you more

Stretching the term is the easiest way to make a payment look affordable, and the most expensive. Same $20,000 at 8%:

Term	Monthly payment	Total interest
36 months	$626.73	$2,562.18
48 months	$488.26	$3,436.41
60 months	$405.53	$4,331.67
72 months	$350.66	$5,247.87
84 months	$311.72	$6,184.84

Going from 60 to 84 months saves $93.80 a month and costs $1,853.17 more in interest. Anyone selling you a payment instead of a price knows this table by heart.

Rate matters too, but less than people think over a short loan. At 6% the payment is $386.66 and total interest is $3,199.36; at 10% it is $424.94 and $5,496.45; at 12% it is $444.89 and $6,693.34. Two points of rate on this loan is $19.41 a month and $1,164.78 over five years: real money, but smaller than the term effect.

Getting honest answers out of the reverse modes

Loan amount mode is for shopping backward from a budget. If $405.53 a month is your ceiling at 8% over 60 months, you can borrow about $20,000; anything above that comes from a down payment or a cheaper purchase.

Interest rate mode is a lie detector. If you are quoted a payment and a term but the rate gets vague, enter the amount, term and payment and the calculator hands you the APR. Compare it to what you were told.

Loan term mode shows what paying extra does. Pay $450 a month on the example loan instead of $405.53 and it is gone in 53 payments instead of 60, saving $533.19 in interest. Pay only $140 a month and the calculator shows 459 months, more than 38 years, with $44,147.93 in interest. At $133.33 or less it never pays off, because that is the first month's interest.

This is the general-purpose tool. For a loan with sales tax, a trade-in or dealer fees, use the Auto Loan Calculator; for property tax, insurance or PMI, the Mortgage Calculator. To see what extra payments do to a schedule, use the Amortization Calculator, and for a card balance the Credit Card Payoff Calculator.

What this calculator doesn't do

It models a fixed-rate loan with equal monthly payments and no fees. It does not handle variable rates, balloon payments, biweekly schedules, origination fees, prepayment penalties or interest that accrues daily. Add any financed fees to the Loan amount.

Results are estimates. Your lender's disclosure, with its exact day counts and rounding, is the figure that governs.

Frequently asked questions

Estimates for planning only. Your lender, dealer or tax authority sets the real numbers, and rates, fees and rules change. This is not financial, tax or legal advice. Nothing you type here leaves your browser. See the terms of use.