Loan Payment Calculator guide
Estimate the monthly payment on a personal loan, auto loan, or any fixed-rate installment loan, then see a year-by-year amortization summary and how extra payments shorten the loan.
How the monthly payment is calculated
Personal loans, auto loans, and most installment loans are fully amortizing: every payment is the same, and the last one brings the balance to zero. The formula is Payment = P × r(1 + r)^n ÷ ((1 + r)^n − 1), with P as the amount borrowed, r as APR ÷ 12, and n as the number of months.
Early payments are mostly interest because interest is charged on the full remaining balance. As the balance falls, more of each payment goes to principal.
Worked example: a $25,000 personal loan
Borrow $25,000 at 7.5 percent APR for 60 months. The monthly rate is 0.075 ÷ 12 = 0.00625. The payment comes out to $500.95. Over five years you pay $30,056.92 total, so $5,056.92 is interest.
Shorten the term to 36 months and the payment jumps to $777.66, but total interest drops to $2,995.60. You save about $2,060 by paying $277 more per month for three years instead of five.
Auto loans: the 72-month trap
A $30,000 car loan at 6.9 percent costs $592.62 a month over 60 months and $510.03 over 72 months. The longer loan feels cheaper, but it costs $6,722 in interest versus $5,557, and it keeps you underwater longer because cars lose value fast. Many new cars lose 20 percent or more of their value in the first year.
A common rule of thumb is 20/4/10: put 20 percent down, finance for no more than four years, and keep total car costs under 10 percent of gross income. You do not have to follow it strictly, but if a deal only works at 72 or 84 months, the car is probably too expensive.
APR versus interest rate
The interest rate is what the lender charges on the balance. APR includes the rate plus required fees, such as origination fees, expressed as a yearly rate. A personal loan at 9 percent with a 5 percent origination fee can have an APR above 11 percent on a three-year term. Always compare APR.
Watch for origination fees that are deducted from the loan proceeds. If you borrow $25,000 with a 5 percent fee, you may only receive $23,750 but still repay the full $25,000 plus interest.
How your credit score changes the math
The rate you are offered depends heavily on credit. For an unsecured personal loan, borrowers with excellent credit might see rates under 10 percent, while fair credit can mean 20 percent or more. On a $25,000, five-year loan, the difference between 7.5 percent and 18 percent is about $135 a month and roughly $8,000 in total interest.
Many lenders offer prequalification with a soft credit pull that does not affect your score. Collect three or four offers, plug each APR and term into this calculator, and compare total paid rather than monthly payment. Multiple hard inquiries for the same type of loan within a short window, typically 14 to 45 days, are usually scored as one.
Debt consolidation: when it helps
Rolling credit card debt at 22 to 29 percent into a personal loan at 10 to 12 percent can save thousands, but only if the cards stay paid off. Run both scenarios: your current cards at their minimums versus the consolidation loan. If the loan saves money and you close the spending leak, it is a strong move. If the cards fill back up, you now have two debts.
Paying a loan off early
Most US personal and auto loans use simple interest with no prepayment penalty, so extra payments go straight to principal and cut total interest. Check your loan agreement for prepayment terms before assuming. Even one extra payment a year can shave several months off a five-year loan.
Use this calculator to compare offers side by side before you apply. Nothing you enter leaves your browser.
How we calculate: sources
Frequently asked questions
How is a loan payment calculated?
Payment = P × r(1 + r)^n ÷ ((1 + r)^n − 1), where P is the amount borrowed, r is the APR divided by 12, and n is the number of months. For $25,000 at 7.5% over 60 months, that is $500.95 a month.
What is the monthly payment on a $5,000 loan?
At 10% APR over 36 months it is about $161, with roughly $808 of total interest. Over 24 months it is about $231 with $537 of interest.
How much do extra payments save?
On a $25,000 loan at 7.5% for 60 months, adding $100 a month pays it off about 11 months early and saves about $1,010 in interest. Confirm your lender applies extra money to principal.
What is an amortization schedule?
A table showing how each payment splits between interest and principal and what balance is left. Early payments are interest-heavy; later payments are mostly principal.
What APR should I expect on a personal loan?
It depends mainly on credit score. The Federal Reserve reported an average 24-month personal loan rate of roughly 12% in 2024 and 2025, while borrowers with fair credit often see 18% to 30%.
Does it include fees?
No. Enter the APR, not the base rate, since APR already folds in required fees such as origination charges. Late fees and optional insurance are not included.
Is this financial advice?
No. It is an educational estimate. Your lender's disclosure is the official figure.
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What is the monthly payment on a $10,000 loan?
At 8 percent APR over 36 months it is about $313; over 60 months, about $203. Enter your exact rate and term above for a precise figure.
Does a longer loan term save money?
No. A longer term lowers the monthly payment but increases total interest paid.