Loan Calculator

The standard amortization formula

A fixed-rate loan is usually repaid with equal monthly payments. Each payment covers that month's interest plus a portion of principal. This calculator uses the standard amortization formula: payment = P × r ÷ (1 - (1 + r)^-n). P is the principal, r is the monthly interest rate, and n is the total number of monthly payments. The monthly rate is the annual percentage rate divided by 12 and by 100. A 30-year loan has 360 payments.

Once the monthly payment is known, total paid is simply payment multiplied by the number of months. Total interest is total paid minus the original principal. If the annual interest rate is zero, there is no compounding, so the payment is just principal divided evenly over the term. The widget handles that case separately to avoid a division-by-zero formula.

What the estimate includes

The result is principal and interest only. Many real loans include additional costs such as origination fees, mortgage insurance, property taxes, homeowners insurance, service charges or late fees. Those costs can change the actual payment significantly. For a car loan or personal loan, the estimate may be close if the lender uses standard amortization and there are no extra fees. For a mortgage, it is best to treat this number as the base payment before escrow and closing costs.

Using the calculator for planning

Try several terms and rates to see how they affect affordability. A longer term usually lowers the monthly payment but increases total interest. A shorter term often costs more per month but pays down principal faster. Because everything runs locally, you can test scenarios privately with no credit check, account or live-rate lookup. Always confirm final numbers with your lender before signing, especially if the loan has variable rates, balloon payments, prepayment penalties or fees that this simple fixed-rate model does not include.