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Toolvica

Loan Calculator

Calculate your loan payment, total interest, and amortization schedule for personal, auto, student, and other amortized loans.

Loan Amount i
$
Interest Rate i6%
0.5%30%
Loan Term i5 years months
0 years30 years
Compound Frequency i
Payment Frequency i
Extra Payment i
$

Table of Contents

How to Use the Loan Calculator

  1. Select your preferred currency from the currency dropdown.
  2. Drag the Loan Amount slider to set how much you want to borrow.
  3. Adjust the Interest Rate slider to match your annual interest rate.
  4. Set the Loan Term using the slider — choose how many years you want to repay.
  5. Choose the compounding frequency (monthly is most common) and your payment frequency.
  6. View your payment amount, total payment, and total interest instantly along with the pie chart and amortization schedule.

About Loan Calculator

A loan calculator helps you estimate your payments on an amortized loan — a loan where you pay back a fixed amount each period over a set term. Common examples include personal loans, auto loans, and student loans.

Our calculator uses the standard amortization formula to compute your payment amount, total interest paid, and total cost over the life of the loan. Choose how interest compounds and how often you make payments, then adjust any input to see real-time updates.

Whether you're planning a major purchase or comparing loan offers, this tool gives you a clear picture of what your loan will cost over time.

On a typical 5-year auto loan at 6% interest, you'll pay about 16% of the loan amount in interest alone. For a $20,000 loan at 6% over 5 years, that's roughly $3,200 in interest — see the full breakdown in the example below.

The real cost of a loan is always higher than the principal because interest accrues over the entire repayment period. Understanding how rates, terms, and compounding interact helps you choose the most affordable loan for your situation.

How to Calculate Loan Payments

The payment amount for an amortized loan depends on the compounding frequency and payment frequency. The formula converts the annual rate to an effective rate per payment period:

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

P = Loan amount (principal)

r = Effective interest rate per payment period, based on the annual rate, compounding frequency, and payment frequency

n = Total number of payments (loan term × payments per year)

M = Payment amount

Example (Monthly Compounding, Monthly Payments):

A $20,000 loan at 6% interest compounded monthly, paid monthly for 5 years.

  1. Monthly rate: 6% ÷ 12 = 0.5% = 0.005
  2. Total payments: 5 × 12 = 60
  3. Monthly payment: $20,000 × [0.005 × (1.005)^60] / [(1.005)^60 - 1] ≈ $386.66
  4. Total interest: $386.66 × 60 − $20,000 = $3,199.60

Real-Life Examples

Personal Loan

Borrow $10,000 at 8% compounded monthly, paid monthly for 3 years. Payment: $313.33. Total interest: $1,279.88. Total paid: $11,279.88.

Auto Loan

Finance $25,000 at 5.5% compounded monthly, paid monthly for 6 years. Payment: $408.45. Total interest: $4,408.20. Total paid: $29,408.20.

Student Loan

Borrow $35,000 at 4.5% compounded monthly, paid monthly for 10 years. Payment: $362.54. Total interest: $8,504.80. Total paid: $43,504.80.

Debt Consolidation

Consolidate $15,000 at 7% compounded monthly, paid monthly for 4 years. Payment: $360.10. Total interest: $2,284.80. Total paid: $17,284.80.

Frequently Asked Questions

What is an amortized loan?
An amortized loan is one where you make regular fixed payments that cover both principal and interest. Each payment reduces the loan balance until it's fully paid off. Common types include mortgages, auto loans, and personal loans.
How is my payment calculated?
Your payment is calculated using the amortization formula, which factors in the loan amount, effective interest rate per payment period (based on compounding frequency), and total number of payments.
What is the difference between APR and APY?
APR (Annual Percentage Rate) is the yearly interest rate without accounting for compounding within the year. APY (Annual Percentage Yield) includes the effect of compounding. For most consumer loans, the quoted rate is APR. Use Monthly (APR) unless your loan specifies otherwise.
How does compounding frequency affect my payments?
More frequent compounding (e.g., monthly vs. annually) results in a slightly higher effective interest rate, which means higher total interest over the life of the loan. The difference is small but adds up on large loans.
Does payment frequency change the total interest?
Yes. Making payments more frequently (e.g., biweekly instead of monthly) reduces the outstanding balance faster, which means less interest accrues over time. However, the total amount paid remains similar.
How does loan term affect my payments?
A shorter loan term means higher payments but significantly less total interest. A longer term reduces your payment amount but increases the total interest paid over the life of the loan.
Can I pay off my loan early?
Most loans allow early payoff, but some may have prepayment penalties. Paying off early saves you money on interest. Check your loan agreement for any prepayment terms.
What factors affect my loan interest rate?
Your credit score, loan amount, loan term, income, debt-to-income ratio, and the type of loan all influence the interest rate you're offered. A higher credit score typically qualifies you for a lower rate.

Disclaimer

This Loan Calculator is provided for informational and educational purposes only. It produces estimates based on the inputs you provide and does not constitute financial advice, a loan offer, or a commitment to lend. Actual loan terms — including interest rates, fees, repayment schedules, and eligibility — vary by lender, your credit profile, and market conditions.

Always consult a qualified financial professional or your lender directly before making borrowing decisions. This calculator provides estimates only, and a professional can help you understand the specific terms available to you based on your unique financial situation.

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