Free calculator
Loan Calculator
Works for auto, personal and student loans. Add an extra payment to see the interest saved and the shorter payoff.
Loan payment formula
For a fixed-rate loan the payment is M = P × r(1+r)n / ((1+r)n − 1), with r the monthly rate and n the number of months. The same formula covers auto loans, personal loans and student loans; what changes is the rate and the term.
Why extra payments matter
An extra payment goes entirely to principal, so it shortens the loan and removes future interest. Small amounts compound: $100 extra per month on a five-year, $20,000 loan at 7.5% cuts several months and hundreds of dollars of interest. The calculator shows the saving next to the baseline.
What lenders may add
Origination fees, late fees and insurance are not part of the payment formula. Check the APR, not just the nominal rate, when comparing offers.
Frequently asked questions
What is the difference between APR and interest rate?
The interest rate sets the cost of borrowing. APR also includes fees, so it is the better number for comparing offers.
Do extra payments always reduce interest?
Yes, when the lender applies them to principal and there is no prepayment penalty. Check the contract first.
Can I use this for a mortgage?
You can, but the mortgage calculator also includes property tax, insurance and HOA.
Why is total interest higher with a longer term?
A longer term spreads the principal over more months, so interest accrues for longer even though the monthly payment is smaller.