Loan Calculator
Calculate monthly payment for a fixed-rate loan (principal, annual rate, years).
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Principal
Annual interest rate %
Term (years)
Result
Monthly payment:
Total paid:
About Loan Calculator
This loan calculator estimates the monthly payment and total repayment for a fixed-rate loan based on principal, rate and term.
Loan Payment Formula
// Monthly payment formula for fixed-rate loans
function calculateMonthlyPayment(principal, annualRate, years) {
const r = (annualRate / 100) / 12; // Monthly interest rate
const n = years * 12; // Total number of payments
if (r === 0) return principal / n;
// Amortization formula: M = P * [r(1+r)^n] / [(1+r)^n - 1]
const payment = principal * (r * Math.pow(1 + r, n)) / (Math.pow(1 + r, n) - 1);
return payment;
}
How Interest Rate Affects Monthly Payment
For a $100,000 loan over 30 years:
| Interest Rate | Monthly Payment | Total Paid | Total Interest |
|---|---|---|---|
| 3.0% | $421.60 | $151,777 | $51,777 |
| 4.0% | $477.42 | $171,870 | $71,870 |
| 5.0% | $536.82 | $193,256 | $93,256 |
| 6.0% | $599.55 | $215,838 | $115,838 |
| 7.0% | $665.30 | $239,509 | $139,509 |
Loan Term Comparison
For a $100,000 loan at 5.0% interest:
| Term | Monthly Payment | Total Interest |
|---|---|---|
| 15 years | $790.79 | $42,343 |
| 20 years | $659.96 | $58,389 |
| 30 years | $536.82 | $93,256 |
Frequently Asked Questions
- How is the monthly loan payment calculated?
- Monthly payment is calculated using the amortization formula: M = P * [r(1+r)^n] / [(1+r)^n - 1], where P is principal, r is monthly interest rate (annual rate / 12), and n is total number of payments (years * 12). This formula ensures each payment covers both interest and principal.
- What is the difference between APR and interest rate?
- The interest rate is the cost of borrowing the principal amount. APR (Annual Percentage Rate) includes the interest rate plus additional fees and costs, giving a more complete picture of the loan's true cost. This calculator uses the nominal annual interest rate.
- How does loan term affect monthly payments?
- A longer loan term reduces monthly payments but increases total interest paid over the life of the loan. For example, a $100,000 loan at 5% costs about $659.96/month over 20 years (total paid: $158,389) vs about $536.82/month over 30 years (total paid: $193,256).
- What types of loans can this calculator estimate?
- This calculator works for fixed-rate loans including mortgages, auto loans, personal loans, and student loans. It does not account for variable rates, balloon payments, or loans with irregular payment schedules.