Basic Loan Calculator
Every loan with a fixed rate and fixed term runs on one formula: the monthly payment that pays the loan off exactly, with interest computed on the shrinking balance each month. This is the plain three-input version: loan amount, rate and term, turned into the monthly payment, the total interest, the interest share of every dollar you repay, and a year-by-year schedule. It is not a mortgage calculator (no escrow, PMI or tax math), and it does not model extra payments, so reach for the mortgage payment calculator for home loans and the repayment home loan calculator when you want to beat the schedule.
How every dollar you repay splits between principal and interest over the life of the loan. Calculate first, then open this tab.
| Year | Paid | Principal | Interest | Balance |
|---|
Each row totals twelve monthly payments. The balance never goes below zero: the final payment is trimmed to exactly clear the loan.
Quick Answer
A $25,000 loan at 8% over 5 years costs $506.91 a month: 60 payments totaling $30,414.59, of which $5,414.59 is interest, or 17.8% of every dollar repaid. That 17.8% earns a Moderate interest cost badge, which is this page’s own rule-of-thumb reading, not a lending standard. In year one, $1,846.92 of the $6,082.92 paid is interest; by the final year, interest is down to $255.59. The calculator above runs the same amortization on your own three inputs.
Key takeaways
- The payment is exact, not approximate. The amortization formula finds the single monthly figure that zeroes the balance on the last payment.
- Interest is front-loaded. Early payments are mostly interest because the balance is largest; later payments are mostly principal.
- Term is the biggest lever. At 8% on $25,000, moving from 3 to 7 years cuts the payment from $783.41 to $389.66 but more than doubles total interest, from $3,202.73 to $7,731.05.
- The interest-share badge is a rule-of-thumb framing of the interest share, under 15% / up to 30% / above 30%, not a lender grade.
- Quick Answer
- How to use the basic loan calculator
- The payment formula, in plain English
- How rate and term move your payment
- Where your money goes each year
- The interest-share badge: a rule-of-thumb reading
- A basic loan is not a mortgage
- What basic loan calculators get wrong
- Frequently asked questions
- Add This Calculator to Your Website
How to use the basic loan calculator
Three inputs, one button, three views. The results stay hidden until you calculate, then the tabs open up.
- Enter the loan amount: the principal you borrow. For a car, that is the price minus down payment and trade-in. The $25,000 in the worked example is pre-filled.
- Enter the interest rate: the annual rate as a percent. The Federal Reserve’s G.19 release publishes average consumer loan rates each month, so you can check whether your quote is typical.
- Enter the term in years: how long you take to repay. Whole years only.
- Click Calculate Loan: the monthly payment, the interest-share badge and the four summary figures appear on the Calculator tab.
- Open the Interest chart tab to see the principal-vs-interest split as a bar, and the Yearly schedule tab for the year-by-year table of paid, principal, interest and balance.
- Copy or share the result with the buttons in the results box when you want to keep a record of the loan.
Invalid entries do not crash the tool: negatives are treated as zero, a term under one year is treated as one year, and blank fields fall back to the worked-example defaults. A 0% rate is handled exactly, as principal divided by the number of payments.
The payment formula, in plain English
The monthly payment is: loan × monthly rate × (1 + monthly rate)payments, all divided by (1 + monthly rate)payments − 1. In words: the lender finds the single level payment whose discounted value equals the loan. The mathematics is the standard closed-end amortization method, the same actuarial approach Regulation Z (Truth in Lending) prescribes for computing annual percentage rates on closed-end credit.
P = loan amount • r = monthly rate (annual ÷ 12) • n = number of payments (years × 12)
On the worked example: P = $25,000, r = 8% ÷ 12 = 0.667% a month, n = 60 payments. The formula returns $506.91, the same every month. Each month the lender takes interest on the current balance first, and whatever is left cuts the principal, which is why the split shifts as the balance shrinks.
How rate and term move your payment
On a $25,000 loan, small rate changes and term choices move the numbers more than most borrowers expect. Every row below is a real run of this calculator, badge included.
| Rate | Term | Monthly payment | Total interest | Interest share | Rule-of-thumb badge |
|---|---|---|---|---|---|
| 5% | 5 yr | $471.78 | $3,306.85 | 11.7% | Low interest cost |
| 8% | 5 yr | $506.91 | $5,414.59 | 17.8% | Moderate interest cost |
| 12% | 5 yr | $556.11 | $8,366.67 | 25.1% | Moderate interest cost |
| 8% | 3 yr | $783.41 | $3,202.73 | 11.4% | Low interest cost |
| 8% | 7 yr | $389.66 | $7,731.05 | 23.6% | Moderate interest cost |
The rate column is worth benchmarking before you sign: the Federal Reserve’s G.19 release for August 2026 put the average 24-month personal loan APR at 11.90% and the average 60-month new car loan at 7.54%. An 8% quote on a 5-year personal loan sits well under the personal-loan average, which is exactly the kind of comparison the CFPB urges borrowers to make with APRs, not just rates.
Where your money goes each year
Interest is front-loaded because the balance is largest at the start. On the worked example, the first year’s $6,082.92 of payments contains $1,846.92 of interest; by the final year the same $6,082.92 contains only $255.59. The Interest chart tab shows the split as one bar; the Yearly schedule tab shows every row.
| Year | Paid | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $6,082.92 | $4,236 | $1,846.92 | $20,764 |
| 2 | $6,082.92 | $4,587.59 | $1,495.33 | $16,176.41 |
| 5 | $6,082.92 | $5,827.33 | $255.59 | $0 |
That front-loading is also why paying extra early in a loan saves disproportionately more: every extra dollar reduces the balance on which all future interest is computed. This calculator does not model extra payments, which is by design; the repayment home loan calculator exists for the beat-the-schedule question.
The interest-share badge: a rule-of-thumb reading
The badge under the monthly payment is this page’s own construct, and it should be read that way. It takes the interest share of repayments (total interest divided by total of all payments) and grades it on three bands: under 15% reads Low interest cost in green, up to 30% reads Moderate interest cost in amber, and above 30% reads High interest cost in amber with the nudge that a shorter term saves thousands.
| Band | Interest share | What it tells you |
|---|---|---|
| Low interest cost | Under 15% | The loan is cheap relative to its size. Short terms and low rates land here. |
| Moderate interest cost | 15% to 30% | The typical personal-loan band. The worked example at 17.8% sits here. |
| High interest cost | Above 30% | Interest is eating a large share of every dollar. Worth testing a shorter term or a lower rate. |
No lender grades loans this way; it is a quick visual read on the share number, nothing more. The share itself is exact: it comes straight from the amortization math, interest divided by the total of all payments.
A basic loan is not a mortgage
Three similar tools answer three different questions, and picking the wrong one gives the wrong answer. Keep them straight:
| Question | Right tool | Why |
|---|---|---|
| What is my payment on a plain fixed loan? | This page | Amount, rate, term. No escrow, no PMI, no tax math. |
| What is my mortgage payment? | Mortgage payment calculator | Mortgages add property tax, insurance, PMI and HOA on top of principal and interest. |
| How do extra payments change my loan? | Repayment home loan calculator | Extra-payment modeling lives there; this page computes the fixed schedule only. |
For a car specifically, the loan amount is the price minus down payment and trade-in. Budgeting the car around the loan, rather than the other way round, is what the car budget calculator is for.
What basic loan calculators get wrong
The crowded loan-calculator results mostly get the formula right and the context wrong:
- Payment-only tools: monthly payment and total paid, nothing else. No total interest figure, no share, no schedule, so the borrower never sees the cost.
- Rate-blind summaries: tools that show the payment but never connect it to market rates. A payment number means little without knowing whether the rate behind it is typical.
- Fee confusion: many borrowers compare the interest rate when they should compare the APR, which folds in lender fees. The CFPB is explicit: compare APRs to APRs, not to interest rates.
- Missing the front-load: tools without a schedule hide the fact that early payments are mostly interest. That is the single most useful insight for anyone considering paying extra.
- The gap this page fills: the exact payment plus the total interest, the interest share with an honest rule-of-thumb badge, the chart and the year-by-year schedule on tabs, and the assumptions stated up front: fixed rate, no fees, no prepayment penalties.
Frequently asked questions
$506.91 a month. That is 60 payments totaling $30,414.59, of which $5,414.59 is interest, or 17.8% of every dollar repaid. The calculator grades that share as a Moderate interest cost, which is this page’s own rule-of-thumb reading.
With the standard amortization formula: monthly payment = P × r(1+r)n ÷ ((1+r)n − 1), where P is the loan amount, r is the monthly rate (annual rate divided by 12) and n is the number of payments. On $25,000 at 8% for 5 years, that is r = 0.667% a month and n = 60 payments, which returns $506.91. The math is the same actuarial method Regulation Z prescribes for closed-end credit computations.
Because interest is charged on the current balance, which is largest at the start. On the worked example, $1,846.92 of the first year’s $6,082.92 in payments is interest; by the final year only $255.59 of the same $6,082.92 is interest. The same $506.91 payment buys more principal every month.
A shorter term always costs less in total interest but demands a higher payment. At 8% on $25,000, 3 years costs $783.41 a month and $3,202.73 in interest; 7 years costs $389.66 a month but $7,731.05 in interest. The CFPB adds a caution for auto loans: longer terms also keep you at risk of negative equity, owing more than the vehicle is worth, for longer.
It is a rule-of-thumb reading of the interest share, not a lending standard. Under 15% of repayments reads Low interest cost, 15% to 30% reads Moderate interest cost, and above 30% reads High interest cost with a suggestion to test a shorter term. The share itself is exact; the band labels are this page’s own framing.
No. The interest rate is the cost of borrowing the principal alone; the APR folds in lender fees and is usually higher. This calculator assumes no fees or prepayment penalties, so compare its rate against lenders’ rates and their APRs against each other, per the CFPB.
Lenders practice risk-based pricing: a higher perceived risk means a higher rate, which means a higher payment and more total interest. The Federal Reserve’s G.19 release showed an average 24-month personal loan APR of 11.90% in August 2026, a useful benchmark for whether your quote is typical.
Yes. It runs entirely in your browser, needs no account, and stores nothing. Copy the result with “Copy my results” or send it to another app with “Share results”.
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References
- Board of Governors of the Federal Reserve System. Consumer Credit – G.19 (August 2026 release: average 24-month personal loan APR 11.90%; average 60-month new car loan APR 7.54%). Accessed October 24, 2026.
- Consumer Financial Protection Bureau. Auto Loan Answers: Key Terms (amortization; APR includes fees while the interest rate does not; fixed-rate financing; loan term and negative equity). Accessed October 24, 2026.
- Consumer Financial Protection Bureau. What Is the Difference Between a Mortgage Interest Rate and an APR? (APR reflects the interest rate plus points, broker fees and other charges; usually higher than the rate). Accessed October 24, 2026.
- Consumer Financial Protection Bureau. What Things Can I Negotiate When Shopping for a Car or Auto Loan? (shorter loan term reduces total loan cost; longer term means more interest and longer exposure to negative equity). Accessed October 24, 2026.
- Internal Revenue Service. Itemized Deductions, Standard Deduction (interest on debt used for personal living expenses, such as credit card debt, is not deductible). Accessed October 24, 2026.
- Electronic Code of Federal Regulations. 12 CFR Part 1026 – Truth in Lending (Regulation Z) (Appendix J: Annual Percentage Rate Computations for Closed-End Credit Transactions, the actuarial method behind amortized loan payments). Accessed October 24, 2026.