Loan Repayment Calculator

Background.

A loan repayment calculator turns three or four numbers into the only figure that actually matters when you sign a credit agreement: what this debt is going to cost you, every month and in total, from disbursement day to the day the balance hits zero. Enter the amount you are borrowing, the interest rate the lender quoted, the length of the term, and any extra principal you plan to pay on top of the scheduled payment, and the calculator runs the standard amortizing-loan formula plus a month-by-month simulation that captures exactly how much faster the loan disappears when you add fuel to the principal. The output is your contractual monthly payment, the total interest you will pay across the life of the loan, the cumulative total you will hand the lender, and the actual payoff month — which can be years earlier than the stated term if you prepay even modestly.

Three distinctions decide whether you are reading the calculator's output correctly. The first is the difference between interest rate and APR. The interest rate is the percentage used to calculate the monthly finance charge against your remaining balance — that is the figure the calculator's annual-rate field expects. The APR is a federally-mandated disclosure under the Truth in Lending Act that bundles the interest rate with origination fees and most other mandatory loan costs, annualized over the term. For personal loans where the only fee is origination, APR and interest rate are often within a percentage point of each other and either is fine for estimating the payment; for mortgages and auto loans where fee structures are more complex, always compare offers by APR and estimate the payment from the note rate.

The second distinction is APY, which describes how interest compounds on a deposit account — savings, CDs, money market funds — and has nothing to do with debt service. If a lender quotes you an APY on a loan, something is wrong. The third distinction is what extra payments actually do. When you send the servicer an extra hundred dollars, that money should reduce your principal balance immediately, which means next month's interest charge is calculated against a smaller number, which frees up more of the scheduled payment to retire principal, which compounds the saving for every remaining month.

On a $25,000 five-year personal loan at 8.5%, an extra $100 per month pays the loan off roughly ten months early and saves around $700 in interest — small in absolute terms because the loan is short, but meaningful as a percentage of total finance charges. On a $250,000 thirty-year mortgage at the same rate, the same $100 saves over $50,000 in interest and shortens the loan by more than four years. The shorter and smaller the loan, the less extra payments matter; the longer and larger the loan, the more they compound.

This calculator is built for the personal-loan and auto-loan case — short-to-medium term, fixed rate, equal monthly payments, no balloon. Use the mortgage calculator linked in the related-calculators sidebar for thirty-year home loans, and refer to the FAQs below for how to think about refinancing math and the secured-versus-unsecured tradeoff.

What is loan repayment calculator?

A loan is a sum of money advanced by a lender to a borrower in exchange for a promise to repay the principal with interest over a defined schedule. In the most common consumer structure — installment loans — the borrower repays the loan in equal monthly payments under an amortization schedule, with each payment split between an interest charge (calculated each month against the remaining principal balance) and a principal reduction (the amount by which the outstanding balance falls that month). Because interest is charged on the unpaid balance, the interest portion is largest at the start of the loan and shrinks every month as the balance is paid down, while the principal portion grows in mirror image. By the final payment, almost the entire installment is principal. The loan reaches a balance of zero at exactly month n × 12 (for a term of n years) when the borrower pays only the contractual amount; it ends earlier if the borrower prepays principal and the lender applies those prepayments to the balance rather than to future scheduled payments. This calculator models the standard fixed-rate, equal-payment, fully amortizing installment loan — the structure used for the vast majority of personal loans, auto loans, federal student loans on standard repayment, and home equity loans (not HELOCs). It does not model interest-only loans, balloon loans, simple-interest auto loans where interest is recomputed daily, or revolving credit lines such as credit cards and HELOCs.

How to use this calculator.

1. 01Enter the loan amount the lender will actually disburse. If the lender deducts an origination fee from the disbursement (common with online personal lenders — often 1% to 8%), enter the post-fee amount you will receive, but be aware your finance charge is calculated on the original gross loan amount.
2. 02Enter the annual interest rate from the loan agreement. For personal loans the rate and APR usually differ by less than a percentage point; for auto loans the APR is the better comparison metric across offers.
3. 03Enter the term in years. Most unsecured personal loans run 2 to 7 years; auto loans typically 3 to 7; private student loans 5 to 20; federal student loans on standard repayment 10 years.
4. 04Optional: enter an extra monthly principal payment. Even small amounts compound — confirm with your lender's servicing platform that prepayments are applied to principal reduction, not credited toward the next scheduled payment.
5. 05Read the four outputs. Monthly payment is the contractual installment. Total interest is what the loan costs you in finance charges over its actual life. Total paid is principal plus interest. Payoff months tells you how many months sooner you finish when extra payments are in play.
6. 06Compare scenarios. Change one input at a time. Shortening the term raises the monthly payment but cuts total interest sharply; dropping the rate has a smaller effect on the monthly payment than most borrowers expect; extra payments shorten the payoff dramatically only when applied early in the schedule.

The formula.

The contractual monthly payment uses the standard amortizing-loan formula M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan principal, r is the periodic monthly rate (annual rate ÷ 100 ÷ 12), and n is the total number of monthly payments (term in years × 12). For the rare zero-interest case the formula collapses to M = P / n. The calculator then runs a month-by-month amortization loop to compute the actual interest paid and the true payoff month, which matters whenever the extra-payment field is non-zero. Each month the simulator charges interest equal to the remaining balance times r, applies the contractual payment plus any extra principal, and reduces the balance accordingly. The loop terminates the moment the balance reaches zero. All currency arithmetic uses arbitrary-precision decimal math to avoid the floating-point rounding errors that plague spreadsheet implementations on long terms. Total paid is the sum of every scheduled installment plus every extra payment actually made; total interest is total paid minus principal.

A worked example.

Frequently asked questions.

References& sources.

1. [1]Consumer Financial Protection Bureau — What is an amortization schedule? (definition and worked example)
2. [2]Consumer Financial Protection Bureau — What is the difference between a fixed APR and a variable APR?
3. [3]IRS Topic No. 505 — Interest Expense (deductibility rules for personal, mortgage, student, business, and investment interest)
4. [4]IRS Publication 936 (2025) — Home Mortgage Interest Deduction
5. [5]Federal Reserve — G.19 Consumer Credit release (monthly series on revolving and non-revolving consumer credit rates)
6. [6]Federal Reserve Bank of St. Louis (FRED) — Finance Rate on Personal Loans at Commercial Banks, 24 Month Loan (TERMCBPER24NS)
7. [7]Bankrate — Personal Loan Calculator methodology and rate research
8. [8]Agarwal, S., Chomsisengphet, S., Mahoney, N., & Stroebel, J. (2015). Regulating Consumer Financial Products: Evidence from Credit Cards. Quarterly Journal of Economics, 130(1), 111-164 — peer-reviewed evidence on consumer credit pricing, fees, and the gap between APR and effective borrowing cost.