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Debt & Loans

Payment Calculator

Determine your fixed monthly payment, total interest costs, and view the complete amortization schedule.

Fixed Term Loan

Enter loan details to view amortization schedule and charts.

Understanding Loan Payments

A payment calculator determines the fixed monthly installment needed to fully pay off a loan over a specific time period. This calculation includes both the principal (the original amount borrowed) and the interest (the cost of borrowing the money).

Amortization

Most standard loans are "amortized", meaning your monthly payment amount stays exactly the same, but the proportion of it going toward interest decreases over time, while the portion going toward the principal increases.

Key Factors

  • Interest RateEven a 1% drop can save thousands over the life of a large loan.
  • Loan TermLonger terms lower monthly payments but significantly increase total interest paid.

Calculation Methodology

This calculator uses the standard amortizing loan formula. It assumes interest compounds monthly and payments are made at the end of each month. It is universally applicable to mortgages, auto loans, personal loans, and student loans.

A = P [ r(1 + r)^n ] / [ (1 + r)^n - 1 ]

Where:
A = Payment amount per period
P = Initial principal or loan amount
r = Interest rate per period
n = Total number of payments or periods

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How the calculation works

The payment calculator solves the level monthly payment for any principal, rate, and term.

M = P × [ r(1+r)^n ] / [ (1+r)^n − 1 ] r = annual rate ÷ 12 n = years × 12

M is principal and interest only. Taxes, fees, and insurance are added after this payment.

Worked example: $15,000 at 6% for 4 years

  1. Loan amount P = $15,000.00.
  2. Monthly rate r = 6 ÷ 12 ÷ 100 = 0.005000.
  3. Number of payments n = 4 × 12 = 48.
  4. Monthly principal and interest = $352.28.
  5. Interest over the full term = $1,909.22.

Same loan, different term or rate

CaseMonthly paymentTotal interest
4 years at 6%$352.28$1,909
3 years at 6%$456.33$1,428
4 years at 7%$359.19$2,241

Frequently asked questions

What is the monthly payment on $15,000 at 6% for 4 years?▼
About $352.28. That payment covers principal and interest. Over 4 years the interest is about $1,909.
What does the payment formula use?▼
It uses the loan amount, the monthly interest rate, and the number of monthly payments. The payment stays level, while the share that goes to interest falls over time.
How much interest does a shorter term save at 6%?▼
A 3-year term on the same $15,000 loan costs $456.33 a month and about $1,428 in interest, compared with $1,909 on the 4-year term.