Loan Payment Calculator
Calculate monthly loan payments for any loan amount, interest rate and term.
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Frequently Asked Questions
How is a monthly loan payment calculated?
Monthly payment = Principal x [r(1+r)^n] / [(1+r)^n - 1], where r = monthly rate (APR/12) and n = number of months. For a $25,000 loan at 7.5% for 60 months: r = 0.00625, n = 60, payment = $500.47. This formula ensures equal payments throughout the loan while fully paying off interest and principal by the final payment.
What loan term gives the best value?
Shorter terms mean higher monthly payments but dramatically less total interest. On a $25,000 loan at 7.5%: 36 months costs $775/month and $2,900 total interest. 60 months costs $501/month and $5,028 total interest. 84 months costs $386/month and $7,408 total interest. Choose the shortest term your budget can comfortably handle.
Can I pay off a loan early without penalty?
Most personal loans and mortgages originated after 2014 have no prepayment penalty. However some lenders still charge prepayment penalties — typically 1-2% of the remaining balance if paid off within 3-5 years. Always check your loan agreement for a prepayment penalty clause before making extra payments or paying off early. Ask your lender directly if unsure.