📊 Loan Calculator
Calculate monthly payments, total interest, and view your complete amortization schedule for any loan.
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Monthly Payment
$1,580.17
Payment Breakdown
Principal (44%)
Interest (56%)
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How Loan Payments Are Calculated
Understanding how loan payments work helps you make better financial decisions. Here's the math behind the numbers:
The Monthly Payment Formula
M = P × [r(1+r)^n] / [(1+r)^n - 1]
Where:
M = Monthly payment
P = Principal (loan amount)
r = Monthly interest rate (annual rate ÷ 12)
n = Total number of payments (years × 12)
How Amortization Works
With each payment, part goes to interest and part to principal. Early payments are mostly interest, but over time, more goes to principal:
- Early payments: High interest, low principal (you're paying interest on the full balance)
- Later payments: Low interest, high principal (as balance decreases, so does interest)
Tips for Saving Money
- Make extra payments: Even small additional payments reduce principal faster and cut total interest
- Bi-weekly payments: Pay half your monthly payment every two weeks = 13 full payments per year
- Refinance when rates drop: A 1% lower rate on a $250K loan saves ~$50K over 30 years
- Choose shorter terms: 15-year mortgages have lower rates and save massive amounts of interest
Common Loan Types
- Mortgage: Home loans, typically 15-30 year terms, rates vary by credit score and market
- Auto Loan: Car financing, usually 3-7 year terms, rates from 3-15%+
- Personal Loan: Unsecured loans, 1-7 year terms, rates from 6-36%
- Student Loan: Education financing, 10-25 year terms, federal rates set by government
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