Loan Calculator

How to use the Loan Calculator

1. Enter how much you're borrowing and the interest rate (APR) you've been offered.
2. Set the loan term in years or months, for example 5 years for a typical car loan.
3. Optionally add an extra amount you could pay each month to see how much sooner you'd be debt-free.
4. Review the monthly payment, the total interest, and the year-by-year payoff schedule.

How it's calculated

The payment comes from the fixed-rate amortization formula. P is the amount borrowed, r is the APR divided by 12, and n is the number of monthly payments:

To build the schedule, each month's interest is the remaining balance times r, and the rest of the payment reduces the balance. Extra payments go straight to principal, which is why they cut both the payoff time and the total interest.

Frequently asked questions

Can I use this for a car loan?
Yes. Enter the amount you'll finance after your down payment and trade-in, the APR from the dealer or bank, and the term in months (such as 60 or 72).

Do extra payments really make a difference?
Usually a big one. Extra money goes directly to principal, so future interest is charged on a smaller balance. Even a small extra amount each month can shave months off a loan. Check that your lender doesn't charge a prepayment penalty first.

What's the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal. APR also folds in certain fees, so it's usually a little higher and is the better number for comparing offers. This calculator treats whatever rate you enter as the yearly rate used for monthly interest.

Why does a longer term cost more overall?
A longer term lowers the monthly payment but gives interest more months to add up, so the total paid is higher. Compare a 48-month and a 72-month term to see the trade-off.