Loan Payment Calculator

An amortized loan charges interest on the balance you still owe, so the split between interest and principal shifts every month even though the payment stays the same.

• Monthly rate r = APR ÷ 100 ÷ 12, payments n = term in months
• Payment = principal × r ÷ (1 − (1 + r)^−n); at 0% APR it is principal ÷ n
• Total interest = payment × n − principal
• With an extra payment the balance is amortized month by month: interest = balance × r, principal reduction = payment + extra − interest

The monthly payment repays the whole principal plus interest by the end of the term. Total interest is what the loan costs you on top of the amount borrowed, and the extra-payment figures come from amortizing the balance month by month.

Common mistakes and assumptions

• Entering the term in the wrong unit — check the months/years selector before reading the payment.
• Confusing APR with a fee-inclusive cost. The math treats the rate you enter as the periodic interest rate; origination or closing fees are not included.
• Assuming every lender applies extra payments to principal automatically; many require you to ask.

A $25,000 loan at 9% APR over 5 years, with $150 extra sent each month.

1. 1Monthly rate = 9 ÷ 100 ÷ 12 = 0.0075, n = 60 payments.
2. 2Payment = $25,000 × 0.0075 ÷ (1 − 1.0075^−60) = $518.96.
3. 3Scheduled total interest = $518.96 × 60 − $25,000 = $6,137.53.
4. 4Sending $668.96 instead clears the loan in 46 months and cuts total interest to about $4,687.
5. 5That is roughly $1,450 saved for the same loan, purely from timing.

Is APR the same as interest rate here?

For this calculation they are treated the same: the rate is applied monthly to the outstanding balance. A true APR also folds in fees, so if your lender quoted an APR that includes origination costs, your payment on the stated principal will be slightly lower than this figure.

Do extra payments always reduce interest?

Yes, as long as your lender applies them to principal and does not charge a prepayment penalty. Confirm both before you start sending more — some servicers hold extra money as a prepaid installment instead.

Why does the last payment differ?

Amortization rarely lands on exactly zero, so the final payment is usually a few dollars smaller. When an extra payment is included, this calculator amortizes month by month and lets the last payment be partial.

Can I use this for a mortgage?

For principal and interest, yes. For a home you will also want property tax, insurance, HOA, and PMI, which the mortgage calculator adds.