Loan Calculator

Calculate monthly payments, total interest, and a full payoff schedule for any loan — auto, personal, student, or other installment loans.

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How Loan Payments Work

Most consumer loans — including auto loans, personal loans, and student loans — use the same amortization formula as mortgages. Each monthly payment covers interest on the remaining balance plus a portion of the principal. The payment amount stays fixed, but the interest-to-principal ratio shifts over time.

Common Loan Types

Auto Loans: Typically 3-7 year terms at rates ranging from 4% to 12%+ depending on credit score and whether the car is new or used. Longer terms mean lower payments but more total interest.

Personal Loans: Unsecured loans with terms from 1-7 years at rates from 6% to 36%. Rates are heavily dependent on credit score. Often used for debt consolidation, home improvement, or major purchases.

Student Loans: Federal loans have fixed rates set by Congress (currently 5-8%). Private student loans vary widely. Terms range from 10-25 years. Income-driven repayment plans may change your effective term.

How Interest Rate Affects Total Cost

On a $25,000 loan over 5 years, the difference between 5% and 10% interest is approximately $3,400 in total interest paid. That's why improving your credit score before borrowing can save thousands. Even a 1% rate reduction on a $25,000 loan saves about $650 over 5 years.

Paying Off Loans Early

Extra payments reduce your principal faster, which reduces total interest. Before making extra payments, check for prepayment penalties (rare but possible on some loans). Also consider whether the extra money might be better used to pay off higher-interest debt first.

Frequently Asked Questions

How is my monthly loan payment calculated?
Using the standard amortization formula: M = P[r(1+r)^n] / [(1+r)^n - 1]. P is the loan amount, r is the monthly interest rate, and n is the total number of payments. This ensures equal payments over the life of the loan.
Should I choose a shorter or longer loan term?
Shorter terms have higher monthly payments but lower total interest. Longer terms are easier on your budget but cost more overall. Choose a term where the monthly payment is comfortably within your budget while minimizing unnecessary interest.
Does paying extra really help?
Yes. Extra payments go directly to principal, reducing the balance that accrues interest. On a $25,000 loan at 7.5% for 5 years, an extra $100/month saves about $850 in interest and pays off the loan 11 months early.
What is a good interest rate for a personal loan?
Rates below 10% are considered good for personal loans. Excellent credit (750+) can get rates of 6-8%. Average credit (670-739) typically sees 10-15%. Rates above 20% are generally considered high.
Can I refinance an existing loan?
Yes. If your credit has improved or rates have dropped since you took out the loan, refinancing to a lower rate can save money. Compare the savings against any fees to make sure refinancing makes sense.

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