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Calculation Machine

Loan Payment Calculator

Monthly payment, total interest and payoff total for any fixed-rate loan.

Reviewed by the Calculation Machine team · Updated 24 October 2026 · How we check our maths

Your values

ⓘ Live results

Results
Monthly payment
$500.95
Total interest
$5,056.92
Total repaid
$30,056.92
Number of payments
60

Working

  1. 1Monthly rate = 0.625%
  2. 2Payments = 60 months

Quick answer

A fixed-rate loan payment is M = P × r ÷ (1 − (1 + r)⁻ⁿ), where P is the amount borrowed, r is the annual rate divided by 12 and n is the number of monthly payments. Borrowing $25,000 at 7.5% for 5 years gives r = 0.625% and n = 60, so the payment is $500.95 a month and total interest is $5,056.92.

What the Loan Payment calculator does

This calculator gives the level monthly payment for any fully amortizing, fixed-rate installment loan, plus the total interest and total repaid over the term. The same formula covers car, motorcycle, boat and RV loans, equipment and term business loans, and personal loans; only the typical rates and terms differ.

The result is principal and interest only. Lenders may add origination fees, required insurance or, on a mortgage, property tax and homeowners insurance. Use the mortgage payment calculator for home loans, and compare offers by APR rather than headline rate when fees are involved.

The calculator assumes monthly payments, interest compounding monthly, and no extra payments. To see how each payment splits between interest and principal over time, or what extra payments save, run the same numbers through an amortization schedule.

The formula

M = P × r ÷ (1 − (1 + r)⁻ⁿ)

Formula variables
SymbolMeaningUnit
MMonthly payment of principal and interest$
PAmount borrowed (after any down payment or trade-in)$
rMonthly interest rate: annual rate ÷ 12 ÷ 100per month
nNumber of monthly payments: years × 12payments

This is the standard annuity (amortization) formula used by US lenders for fixed-rate installment loans and described in the CFPB's consumer loan guides. Total interest = M × n − P.

It does not apply directly to interest-only loans (monthly payment = P × annual rate ÷ 12), balloon loans (a smaller payment followed by a lump sum), variable-rate loans or loans with simple daily interest where payment timing changes the cost. See the section below for those variants.

Worked examples

Five-year auto or personal loan

You borrow $25,000 for a car at 7.5% APR over 60 months.

Inputs

  • Loan amount25000 $
  • Annual interest rate7.5 %
  • Term5 years

Result

  • Monthly payment$500.95
  • Total interest$5,056.92
  • Total repaid$30,056.92
  • Number of payments60

The payment is $500.95 and interest adds $5,056.92, about 20% of the amount borrowed. Shortening the term to 3 years raises the payment but cuts interest by roughly $2,000.

Fifteen-year boat or RV loan

A buyer finances $40,000 of a boat at 8.9% over 15 years, a common term for larger recreational loans.

Inputs

  • Loan amount40000 $
  • Annual interest rate8.9 %
  • Term15 years

Result

  • Monthly payment$403.33
  • Total interest$32,599.50
  • Total repaid$72,599.50
  • Number of payments180

The $403.33 payment looks affordable, but total interest of $32,599.50 is over 80% of the loan. Long terms on depreciating assets can leave you owing more than the boat is worth for years.

Ten-year business term loan

A company borrows $150,000 for equipment at 9.5% over 10 years.

Inputs

  • Loan amount150000 $
  • Annual interest rate9.5 %
  • Term10 years

Result

  • Monthly payment$1,940.96
  • Total interest$82,915.60
  • Total repaid$232,915.60
  • Number of payments120

The business must cover $1,940.96 a month, or about $23,292 a year, from cash flow. Lenders typically want operating income comfortably above that, often measured by a debt service coverage ratio of 1.25 or more.

How the loan term changes payment and interest

A longer term lowers the monthly payment but increases total interest, because you owe the balance for longer. For the same $25,000 at 7.5%:

$25,000 borrowed at 7.5% APR
TermMonthly paymentTotal interestTotal repaid
3 years (36 payments)$777.66$2,995.60$27,995.60
5 years (60 payments)$500.95$5,056.92$30,056.92
7 years (84 payments)$383.46$7,210.38$32,210.38

Interest-only, balloon and comparison loans

  • Interest-only loan: during the interest-only period the payment is just P × annual rate ÷ 12. On $25,000 at 7.5% that is $156.25 a month, and the balance does not fall at all. When the period ends, the full balance amortizes over the remaining term, so payments jump.
  • Balloon loan: payments are calculated as if the loan ran over a long term (say 30 years) but the remaining balance is due in one lump sum after a shorter period (say 5 or 7 years). Run this calculator with the long term to get the payment, then read the balance at the balloon date from an amortization schedule.
  • Comparing two offers: run each offer separately and compare total repaid plus fees. A lower rate with a longer term can still cost more in total. For offers with different fees, compare the APRs.

Typical terms by loan type

Rates depend on your credit score, the lender and the economy, so check current offers. Terms are more stable:

  • Auto loans: commonly 36–72 months; 84-month loans exist but increase the risk of negative equity.
  • Motorcycle loans: often 24–72 months.
  • Boat and RV loans: often 10–20 years for larger amounts, shorter for smaller ones.
  • Personal loans: usually 2–7 years, unsecured, with higher rates than secured loans.
  • Business term loans: commonly 1–10 years; SBA 7(a) loans can run up to 10 years for working capital and equipment and up to 25 years for real estate.

How to use the Loan Payment Calculator

  1. 1Enter the amount you will borrow after any down payment or trade-in.
  2. 2Enter the annual interest rate from the loan offer (use the APR if fees are rolled in).
  3. 3Enter the term in years; for a 66-month loan enter 5.5.
  4. 4Read the monthly payment, then compare total interest across different terms.

Frequently asked questions

How do I calculate a monthly loan payment by hand?

Divide the annual rate by 1,200 to get r, multiply the years by 12 to get n, then compute P × r ÷ (1 − (1 + r)^−n). For $10,000 at 6% over 3 years that is $304.22.

Does a bigger down payment lower my payment?

Yes, in direct proportion. Payment scales with the amount borrowed, so borrowing 20% less cuts the payment and the total interest by 20%.

How much loan payment can I afford?

Lenders look at your debt-to-income ratio: total monthly debt payments divided by gross monthly income. Many prefer it below about 36%; the debt-to-income calculator shows where a new payment would put you.

Is it better to pay off a loan early?

Extra payments reduce the balance faster and cut total interest, as long as the loan has no prepayment penalty. Paying off a 7.5% loan early is a guaranteed 7.5% return on that money.

Why is my lender's payment slightly different?

Lenders may round the rate, count days between payments, add fees or insurance, or set a first payment date more than a month away, which adds a little interest.

References

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