What this loan calculator shows
Enter the loan amount, the interest rate, the term and how the loan is repaid. The calculator shows the monthly payment, the total interest over the life of the loan and the total of all payments. Open the amortization schedule to see how much of each payment goes to principal and to interest, and how the balance falls.
It works for any fixed-rate installment loan with monthly payments, such as a mortgage, an auto loan or a personal loan. The payment shown is principal and interest only. Property taxes, homeowners insurance or mortgage insurance that a lender may collect with a mortgage payment are not included.
Interest rate or APR: which one to enter
Enter the interest rate, not the APR. The Consumer Financial Protection Bureau (CFPB) explains that the interest rate is the yearly cost of borrowing the money and does not include fees. The APR is a broader measure that adds points, mortgage broker fees and other charges, so it is usually higher than the interest rate.
On a mortgage Loan Estimate, the interest rate is on page 1 under "Loan Terms" and the APR is on page 3 under "Comparisons." The APR is useful for comparing offers, but the monthly payment is figured from the interest rate.
Repayment types
| Type | How it works | Payment over time |
|---|---|---|
| Fixed payment | The standard fixed-rate amortizing loan. Each payment covers that month's interest, and the rest pays down principal. | Same every month |
| Equal principal | The same amount of principal every month, plus interest on the remaining balance. | Highest at the start, then falls |
| Interest-only + balloon | Interest only each month; the whole balance is due in one final payment. | Low, then one large final payment |
The CFPB describes amortization this way: in an amortizing loan, more of each payment goes to interest early in the loan and more goes to principal toward the end, so the balance falls slowly at first and faster near the end. A longer term lowers the monthly payment but raises the total interest you pay.
The formulas
For every type, the monthly rate r is the annual interest rate ÷ 12 ÷ 100, and each month's interest is the remaining balance × r.
Fixed monthly payment = P × r ÷ (1 − (1 + r)^−n)
P is the loan amount and n is the number of months in which principal is repaid. If the rate is 0%, the payment is simply P ÷ n.
Equal principal payment = P ÷ n + balance × r
Interest-only payment = P × r, final payment = P + that month's interest
Interest-only period
An interest-only period is a set number of months at the start of the loan when you pay only interest. The CFPB notes that the amount you owe does not go down during that time, and once it ends the monthly payments rise above the interest-only payments.
In this calculator the interest-only period sits inside the loan term. A 30-year loan with a 5-year interest-only period has 60 interest-only payments, then the balance is paid off over the remaining 300 months. That is why the period must be shorter than the term, and why it raises both the later payment and the total interest.
Balloon payments
The CFPB defines a balloon payment as a large, one-time payment at the end of the loan term. Payments before it may be lower, but you could owe a big amount at the end. Balloon mortgages generally have shorter terms, often 5 to 10 years, and the CFPB warns that you may not be able to refinance if your property value or finances decline. The "Interest-only + balloon" option shows the extreme case, where the entire principal is due in the last payment.
Rounding and why your lender's numbers can differ
- The fixed payment and each month's interest are rounded to the nearest cent. The final payment pays off whatever balance remains, so it can differ from the others by a few cents or dollars.
- The calculator applies the same monthly rate every month. Lenders may count actual days, use a different payment date or charge fees, so a real schedule can differ slightly.
- The rate is assumed to stay the same for the whole term. With an adjustable-rate loan, payments change when the rate does.
Worked examples
| Loan | Monthly payment | Total interest |
|---|---|---|
| $200,000 · 6% · 30 years | $1,199.10 | $231,677.04 |
| $200,000 · 6% · 15 years | $1,687.71 | $103,788.82 |
| $200,000 · 6% · 30 years, first 5 interest-only | $1,000.00, then $1,288.60 | $246,582.07 |
| $30,000 · 7% · 5 years | $594.04 | $5,642.12 |
The first two rows show the CFPB point about term length: the 15-year loan costs $488.61 more a month but saves $127,888.22 in interest. In the first month of the 30-year loan, $1,000.00 of the $1,199.10 payment is interest and only $199.10 reduces the balance.
Before you borrow
- Compare offers on the same basis: the interest rate for the payment, and the APR and total fees for the cost of the loan.
- Check the total interest and any balloon or post-interest-only payment, not just the first monthly payment.
- Ask whether the loan has a prepayment penalty if you might pay it off early.
Sources
- Consumer Financial Protection Bureau. What is the difference between a mortgage interest rate and an APR? Interest rate vs APR, where each appears on the Loan Estimate.
- Consumer Financial Protection Bureau. What is amortization and how could it affect my auto loan? Last reviewed Sep 24, 2024. Amortization schedule, interest-heavy early payments, term length and total interest.
- Consumer Financial Protection Bureau. What is an "interest-only" loan? Balance does not fall during the interest-only period; payments rise afterward.
- Consumer Financial Protection Bureau. What is a balloon payment? When is one allowed? Last reviewed Aug 28, 2026. Definition, typical terms and risks.
Frequently asked questions
How is a monthly loan payment calculated?
For a fixed-rate amortizing loan, payment = P × r ÷ (1 − (1 + r)^−n), where r is the annual rate ÷ 12 and n is the number of monthly payments. $200,000 at 6% for 30 years comes to $1,199.10 a month.
Should I enter the APR or the interest rate?
Enter the interest rate. The CFPB explains that the APR adds points, broker fees and other charges to the interest rate, so it is usually higher. On a Loan Estimate the interest rate is on page 1 and the APR on page 3.
How much interest will I pay on a 30-year loan?
At 6%, a $200,000 loan over 30 years costs $231,677.04 in interest. Over 15 years the payment rises to $1,687.71 but total interest falls to $103,788.82.
What does an interest-only period do?
You pay only interest for the first months, so the balance does not go down. Afterward the balance is repaid over the rest of the term, so the payment rises and total interest goes up.
Why is my lender's payment different?
Lenders may count actual days, add property taxes and insurance to a mortgage payment, or charge fees. This calculator shows principal and interest at a fixed rate, rounded to the cent.
Is this financial advice?
No. It is an estimate for planning and comparison. Check the Loan Estimate or loan agreement from your lender before you decide.