Introduction
This loan calculator shows you what a loan will really cost. Type in the loan amount, interest rate, and term. You get your monthly payment, total interest, total cost, and payoff date right away.
You can also compare two loans side by side. Put one loan in the Loan A box and another in the Loan B box. The tool shows which one costs less over time.
Want to pay off your loan faster? Add an extra monthly payment. The calculator shows how much interest you save and how many months you cut off. It also checks your debt-to-income ratio against the 28% and 36% guidelines many lenders use.2
You also get a full amortization schedule. It lists every payment, how much goes to principal, how much goes to interest, and your balance each month. Charts and a step-by-step math breakdown help you see exactly how the numbers work.
How to use our Loan Calculator
Enter your loan amount, interest rate, term, and any down payment or extra payment. The calculator shows your monthly payment, total interest, total loan cost, payoff date, a debt-to-income check, and a full amortization schedule. Fill in Loan B too if you want to compare two loans side by side.
Loan Amount: Type the full price before any down payment. If you only know the amount you want to borrow, type that and set Down Payment to 0. You can type any amount from $1,000 to $100,000,000, or drag the slider up to $1,000,000.
Annual Interest Rate: Type the loan's yearly interest rate, like 6.5, not its APR. The APR also counts lender fees.1 You can enter 0% up to 35%.
Loan Term: Type how long you will pay, then pick Years or Months from the drop-down. The most you can enter is 30 years, or 360 months.
Down Payment: Type the cash you pay up front. This is optional. The calculator subtracts it from the loan amount to get the amount you finance.
Extra Monthly Payment: Type any extra dollars you plan to add each month. This is optional, and it lowers your interest and shortens your payoff time.
Compound Frequency: Choose Monthly, Semi-Annually, or Annually. This is how often interest is added. Payments stay monthly either way.
Loan B fields: Fill in the same six boxes for a second loan. The results table then shows the difference between Loan A and Loan B.
Loan Start Date: Pick the month and year your loan begins. Your first payment is one month after this date.
Gross Monthly Income: Type your monthly pay before taxes. This is optional, and it checks your payment against the 28% front-end guideline.
Other Monthly Debt Payments: Type what you pay each month for cards, car loans, and student loans. This is optional, and it checks the 36% back-end guideline.
Schedule for / View: Pick Loan A or Loan B, then choose Monthly or Annual to see how each payment splits between principal and interest.
Click Calculate to see your results, or Reset to start over.
What Is a Loan?
A loan is money you borrow now and pay back later, plus interest. Interest is the fee the lender charges for letting you use their money. Fixed-rate home mortgages, car loans, and personal installment loans are usually paid back in equal monthly payments until the balance hits zero.
The Parts of a Loan
- Loan amount: the full price before any down payment.
- Down payment: cash you pay up front. It lowers how much you borrow.
- Principal: the amount you actually finance (loan amount minus down payment).
- Interest rate / APR: the yearly cost of borrowing. APR also folds in lender fees, so it is higher than the plain rate when the loan has fees.1
- Term: how long you have to pay it off, like 15 or 30 years.
- Compounding: how often interest is added to the balance.
How Monthly Payments Work
Each monthly payment is split into two parts: interest and principal. Early in the loan, a bigger share of each payment goes to interest than later on.4 That is because the balance is still large. As the balance shrinks, more of each payment goes to principal. This slow shift is called amortization. The full list of every payment, split by interest and principal, is the amortization schedule.4
Term Length Changes the Cost
A longer term means a smaller monthly payment but more interest over the life of the loan.4 A shorter term costs more each month but generally saves money overall. That is why a 15-year loan and a 30-year loan for the same amount can differ by tens of thousands of dollars or more in total cost.
Extra Payments Save Money
Extra money paid toward the principal lowers the amount you owe. A smaller balance means less interest is charged next month, so you pay the loan off early and keep more of your money. Even $100 or $200 a month can cut years off a mortgage. Paying half your monthly payment every two weeks works much the same way, because 26 half payments add up to 13 full payments a year. The break-even point is the month when the interest you avoided grows larger than the extra cash you have sent in.
The 28/36 Rule
Lenders check if you can afford the payment by comparing your monthly debt payments to your gross monthly income, which is your income before taxes and other deductions.3 On a home loan, the front-end ratio is your housing payment (principal, interest, taxes, and insurance) divided by your gross monthly income, and lenders usually want it at or under 25% to 28%.2 The back-end ratio counts your housing payment plus your other long-term debt, and lenders usually want it at or under 33% or 36%.2 Different loans and lenders set different limits.3 Both ratios are important factors in whether a lender will make the loan.2 This calculator uses the loan's principal and interest only, so on a home loan your taxes and insurance would raise both ratios.
Tips Before You Borrow
- Compare offers using APR, not just the interest rate.
- A bigger down payment lowers your payment and your total interest, and on a conventional home loan can help you skip PMI.
- Look at total cost, not only the monthly payment.
- Ask if the lender charges a fee for paying early.
- A better credit score usually earns a lower rate.1 Keeping your credit utilization low helps.
- Already borrowing? Compare your current deal against a refinance or a debt consolidation loan.