A loan payment is calculated using the formula M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ], where P is principal, i is monthly interest rate, and n is number of months. Monthly payments depend primarily on the interest rate and the loan term; shortening the term usually reduces total interest paid significantly.

Clear, interactive repayment plans for home, auto, or personal loans.

Formula

Monthly Payment (M) = Principal (P) * [ r(1+r)^n / ((1+r)^n - 1) ]. Total Interest = (M * n) - P.

How It Works

Enter the total amount you wish to borrow.
Select the loan duration in years using the slider.
Adjust the interest rate to see how it affects your monthly payment instantly.
Review the total interest cost and remaining balance chart.

Formula:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ] where i is monthly rate and n is total months.

Examples

$300,000 mortgage for 30 years at 6% interest.

Result: $1,799 monthly payment. Total interest paid: $347,514.

$30,000 auto loan for 5 years at 4% interest.

Result: $552 monthly payment. Total interest paid: $3,150.

$200,000 loan for 15 years at 5.5% interest.

Result: $1,634 monthly payment. Total interest paid: $94,142.

Frequently Asked Questions

What is amortization?

Amortization is the process of paying off a debt over time through regular payments. A portion goes to interest, and the remainder reduces the principal balance.

How do early payments help?

Making extra payments directly to the principal reduces the total interest you owe and shortens the life of the loan significantly.

fixed rate vs. variable rate?

Fixed rates stay the same for the entire term. Variable rates (ARM) can change periodically based on market indices, affecting your monthly payment.

What is APR?

The Annual Percentage Rate (APR) includes both the interest rate and other fees or costs related to the loan, providing a more accurate "real" cost.

How much mortgage can I afford?

Lenders typically recommend that your total monthly housing costs (principal, interest, taxes, insurance) should not exceed 28% of your gross monthly income.

Key facts

Amortization schedules show how each payment is split between principal and interest. Early payments primarily reduce the principal, leading to compounding savings on interest over the remaining term. The "Principal" is the initial amount borrowed; "Interest" is the cost of borrowing that amount. Common loan terms are 15 or 30 years for mortgages, and 3-7 years for auto loans.

Trend & Behavior Analysis

In the early years of a long-term loan (like a 30-year mortgage), the majority of your payment goes toward interest. As the balance decreases, the portion applied to principal grows exponentially, accelerating your equity build-up in the final third of the term.