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Instantly calculate monthly payments, total interest accrued, and complete amortization schedules for personal, auto, and student loans. This free online tool allows you to calculate loan payments quickly and accurately. No sign-up or installation required.
When consumers take out a loan—whether it’s $10,000 for a car or $50,000 for college—the primary focus is almost always on the "Monthly Payment." Salespeople are trained to manipulate the duration of a loan to get the monthly payment into a range the consumer finds acceptable. However, hyper-focusing on the monthly payment blinds the consumer to the most important metric of all: The Total Cost of Interest.
Interest is essentially the "rent" you pay a bank for the privilege of using their money. By using our loan calculator, you rip away the smoke and mirrors of finance. You will see exactly how much money you are throwing away to the bank over the life of the loan, allowing you to make mathematically sound financial decisions.
Every standard amortized loan in the world is dictated by three primary variables. Changing just one of these variables radically alters the math:
This is the core amount of money you are actually borrowing to buy the asset. It does not include fees or interest. If you buy a $20,000 car and put $5,000 down, your Principal is $15,000.
The Annual Percentage Rate. This is the annualized cost of borrowing the principal. A low APR is critical. Even a 2% difference on a large loan can cost you thousands of dollars.
The length of time you have to pay the money back (usually in months). A longer term lowers your monthly payment, but drastically increases the total interest you will pay to the bank.
Because most consumer loans (like auto loans and mortgages) calculate interest based on the remaining principal balance, making even small extra payments can have a massive cascading effect on your wealth.
When you pay an extra $50 on your monthly loan bill, that $50 bypasses interest entirely and attacks the Principal head-on. Because the Principal is now smaller, next month's interest charge will be mathematically smaller, allowing more of your standard payment to attack the principal again. This compounding effect can shave years off your loan and save you massive amounts of money.
Expert clarification on amortization, fixed vs variable rates, and origination fees.