Simple Loan Calculator
Find your monthly payment, total interest paid, and view a full amortization schedule for any loan.
| Month | Payment | Principal | Interest | Balance |
|---|
Estimated monthly payment for a $10,000 loan at various rates and terms:
| Loan Amount | Rate | 3 Years | 5 Years | 7 Years |
|---|---|---|---|---|
| $10,000 | 4% | $295.24 | $184.17 | $136.69 |
| $10,000 | 6% | $304.22 | $193.33 | $146.89 |
| $10,000 | 8% | $313.36 | $202.76 | $155.59 |
| $20,000 | 5% | $599.42 | $377.42 | $281.91 |
| $30,000 | 6% | $912.66 | $579.98 | $440.67 |
How the Simple Loan Calculator Works
The simple loan calculator uses the standard loan amortization formula to find your monthly payment. It accounts for principal, interest rate, and term to give you an accurate monthly figure and a breakdown of total cost.
The core formula is: Payment = P × i(1 + i)^n divided by ((1 + i)^n minus 1), where P is the loan amount, i is the monthly interest rate, and n is the number of months.
Loan Payment Formula Variables
- P = Principal (the total loan amount)
- i = Annual rate divided by 100, then divided by 12 to get the monthly decimal rate
- n = Loan term in total months (years multiplied by 12)
What Factors Affect Loan Payments?
Three main factors determine what you pay each month on a loan:
- Loan Amount (Principal): The amount you borrow. Higher principal means higher payments.
- Interest Rate: The annual percentage rate charged by the lender. A lower rate reduces your payment and total cost.
- Loan Term: How long you have to repay. Longer terms lower monthly payments but increase the total interest you pay.
Understanding an Amortization Schedule
An amortization schedule shows the breakdown of every payment you make over the life of the loan. In the early months, most of your payment goes toward interest. As the balance decreases, more goes toward principal. By the final payment, almost all of it is principal. This is called front-loaded interest and is standard for all installment loans.
Tips to Reduce Your Loan Cost
You can reduce the total amount you pay on any loan with these strategies:
- Make extra payments toward principal to shorten the loan term
- Choose the shortest term you can comfortably afford
- Shop for the lowest available interest rate before signing
- Make biweekly payments instead of monthly to reduce principal faster
Frequently Asked Questions
The monthly loan payment formula is: Payment = P × i(1+i)^n / ((1+i)^n – 1), where P is the loan amount, i is the monthly interest rate (annual rate divided by 12), and n is the number of months.
An amortization schedule is a table showing each loan payment broken down into the interest and principal portions, listed month by month until the loan is fully paid off.
To find total interest paid, multiply your monthly payment by the number of months, then subtract the original loan amount. The difference is the total interest cost.
The three main factors are the loan amount, the annual interest rate, and the loan term. A higher rate or shorter term increases the payment; a longer term lowers monthly payments but increases total interest.
A longer loan term means lower monthly payments but significantly more total interest paid. A shorter term means higher monthly payments but less total interest, saving money overall.