Monthly loan payment calculator
This monthly loan payment calculator finds your monthly payment in one step, and the table below works backward from a payment to the amount you can borrow.
Amortization schedule
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | $3,608.95 | $1,037.57 | $8,391.05 |
| 2 | $3,986.84 | $659.68 | $4,404.21 |
| 3 | $4,404.21 | $242.19 | $0.00 |
The formula behind the payment
The monthly payment equals the loan amount times the monthly rate, divided by one minus the monthly rate plus one raised to the negative number of months. With a 0% rate the payment is simply the amount divided by the number of months. The calculator rounds each payment to the cent, as lenders do.
Choosing the payment you can afford
Start from the payment you can comfortably make and use the borrowing table to see what loan it supports at the rate you expect. That works better than starting from the amount you want and discovering the payment is too high.
$12,000 at 10% by loan length
Borrowing $12,000 at 10% over 3 years costs $387.21 a month and $1,939 in interest, $13,939 in total. Shorter terms raise the payment but cut the interest, and longer terms do the reverse. The table shows the trade-off across common terms.
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 12-month | $1,054.99 | $660 | $12,660 |
| 2-year | $553.74 | $1,290 | $13,290 |
| 3-year | $387.21 | $1,939 | $13,939 |
| 4-year | $304.35 | $2,609 | $14,609 |
| 5-year | $254.96 | $3,298 | $15,298 |
| 7-year | $199.21 | $4,734 | $16,734 |
| 10-year | $158.58 | $7,030 | $19,030 |
How your rate changes the cost
Personal loan rates vary widely with credit score, from the mid single digits for strong borrowers to 30% or more for weak credit. On $12,000 over 3 years, moving from 10% to 13% adds $616 in interest.
| APR | Monthly payment | Total interest |
|---|---|---|
| 7% | $370.53 | $1,339 |
| 8.5% | $378.81 | $1,637 |
| 10% | $387.21 | $1,939 |
| 11.5% | $395.71 | $2,246 |
| 13% | $404.33 | $2,556 |
How much can you borrow for a given payment?
Working backwards at 10% over 3 years, here is the loan size each monthly payment supports.
| Monthly payment | Loan amount |
|---|---|
| $200/month | $6,198 |
| $300/month | $9,297 |
| $400/month | $12,396 |
| $500/month | $15,496 |
When is half of a $12,000 loan repaid?
With a $387.21 payment, the balance falls below half ($6,000) after 20 payments, about 1.7 years into a 3 years loan. Because interest is highest at the start, the second half of the loan is paid down much faster than the first.
| After | Balance left | Paid so far |
|---|---|---|
| 1 year | $8,391 | $4,647 |
| 2 years | $4,404 | $9,293 |
Frequently asked questions
How do I calculate a monthly loan payment by hand?
Use payment = P × r ÷ (1 − (1 + r)^−n), where P is the amount, r is the monthly rate (APR ÷ 12) and n is the number of months.
Does the payment include insurance or taxes?
No. For a loan secured by property or a vehicle, insurance and taxes are separate costs.
How is a loan payment calculated?
The payment is principal × r ÷ (1 − (1 + r)^−n), where r is the monthly rate (APR ÷ 12) and n is the number of months. Each payment covers that month’s interest first, and the rest reduces the balance.
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the money. APR also includes certain fees, so it is the better number for comparing offers. This calculator treats the rate you enter as the rate that accrues on the balance.
Related calculators
Estimates from standard loan formulas, not a loan offer or financial advice. Example rates are assumptions: use your own quote.