Loan Payment Calculator
The Loan Payment Calculator computes the monthly payment for personal loans, business loans, or any fixed-rate installment loan based on amount, rate, and term. If you enter 0% for the interest rate, the calculator falls back to a simple division (loan amount ÷ number of months) since the standard amortization formula divides by zero at that rate. The result reflects principal and interest only — it doesn't add origination fees, closing costs, or prepayment penalties that some lenders charge on top of the stated rate, so your real borrowing cost can run higher than the figure shown. Because the term field expects whole months, entering a term in years by mistake (e.g., "5" instead of "60") will produce a payment far higher than the loan actually requires.
How This Tool Works
Enter your loan amount, annual interest rate, and term in months to calculate your fixed monthly payment and total interest paid.
Formula & Method
Monthly payment = P × r × (1+r)^n ÷ ((1+r)^n − 1), the standard fixed-rate amortization formula.
Example Calculation
A $15,000 loan at 9% APR over 48 months. Step 1: convert the annual rate to a monthly rate — 9% ÷ 12 = 0.75% (0.0075 as a decimal). Step 2: raise (1 + monthly rate) to the power of the number of payments — (1.0075)^48 ≈ 1.431405. Step 3: apply the amortization formula — M = 15,000 × 0.0075 × 1.431405 ÷ (1.431405 − 1) = $373.28/month. Step 4: multiply by 48 payments for total repaid — $373.28 × 48 = $17,917.23. Step 5: subtract the original loan amount for total interest — $17,917.23 − $15,000 = $2,917.23.
Frequently Asked Questions
Does this work for any type of loan?+
Yes — this formula applies to any fixed-rate, fixed-term installment loan, including personal loans, business loans, and student loans.
What if my loan has a variable rate?+
This calculator assumes a fixed rate for the full term. For variable-rate loans, your payment will change if the rate changes, so treat this as an estimate based on the current rate.
How is total interest calculated?+
Total interest equals your total of all payments (monthly payment × number of months) minus the original loan amount.
What happens if I enter 0% for the interest rate?+
The calculator switches to a simple formula — loan amount ÷ number of months — since the standard amortization formula can't divide by a zero interest rate. Total interest paid will correctly come out to $0, and your monthly payment will just be the loan amount spread evenly across the term.
The term field asks for months — what if I only know the term in years?+
Multiply by 12 first: a 5-year loan is 60 months, a 3-year loan is 36 months. Entering the number of years directly (e.g., "5" instead of "60") gets treated as a 5-month loan, producing a monthly payment far higher than the loan actually requires.
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<a href="https://everyfix.net/tools/loan-payment-calculator/">Loan Payment Calculator</a> by <a href="https://everyfix.net">EveryFix</a>Related Tools
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