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Loan Calculator
Monthly payment, total cost & payoff timeline
7%
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Monthly Payment
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Total Payment
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Total Interest
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Interest Ratio
How Loan Payments Are Calculated
Loan payments are determined by three factors: the amount borrowed (principal), the interest rate, and the loan term. This calculator uses the standard amortization formula to determine your fixed monthly payment.
Understanding Interest on Loans
Interest is the cost of borrowing money. A lower interest rate means you pay less over the life of the loan. Even a small difference in rate — say 5% vs 7% — can mean thousands of dollars in savings on a large loan.
Tips to Reduce Loan Costs
- Shop around for the lowest interest rate
- Choose a shorter loan term if you can afford higher payments
- Make extra payments toward principal when possible
- Refinance if rates drop significantly