Whether you're considering a personal loan, car loan, or student loan, understanding your monthly payments before borrowing is crucial for financial planning.
How Loan Payments Are Calculated
Monthly payment = P[r(1+r)^n]/[(1+r)^n-1], where P = principal, r = monthly interest rate, n = number of payments.
Factors That Affect Your Payment
Loan amount: Higher principal means higher payments. Interest rate: Even small rate differences add up significantly over time. Loan term: Longer terms mean lower monthly payments but more total interest.
Example Comparison
For a $20,000 loan at 6% interest: 3-year term: $608/month, $1,898 total interest. 5-year term: $387/month, $3,200 total interest. The longer term saves $221/month but costs $1,302 more in interest.
Use Our Free Loan Calculator
Enter loan amount, interest rate, and term length. See monthly payment, total interest, total cost, and a full amortization schedule. Compare different scenarios side by side.