Simple Loan Calculator
Free simple loan calculator. Get the monthly payment, total interest, and payoff impact of extra payments for personal, student, or car loans.
What is a simple loan calculator?
A simple loan calculator works out the fixed monthly payment for any amortizing loan — personal, student, car, or small business — given the amount, interest rate, and term. It also shows total interest and how extra payments shorten the loan.
How this calculator works
- Enter the loan amount, annual percentage rate (APR), and term in months.
- It applies the standard amortization formula to find the level monthly payment.
- Total interest and total paid are computed across the full term.
- Add an extra monthly payment and it simulates the payoff month by month, showing interest saved and months trimmed.
How to use the result
- Compare the monthly payment against your budget before signing anything — a payment you can’t comfortably sustain is the real cost, not the rate.
- Check total interest. A longer term cuts the payment but adds interest — the calculator makes that trade-off explicit.
- Try an extra payment. Even $50 a month on a 60-month loan typically saves hundreds and shortens the term by several months.
- Shop the rate. A 1% lower APR on a $20,000 5-year loan saves several hundred dollars in interest.
How is a loan payment calculated?
Monthly payment = principal × [r / (1 − (1 + r)^(−n))], where r is the monthly rate (APR ÷ 12) and n is the number of months. The formula spreads principal and interest so each payment is equal while the interest portion shrinks over time.
Common mistakes
- Using the monthly rate as the annual rate. Divide APR by 12 before calculating — the calculator handles it, but comparing “monthly” quotes needs the same conversion.
- Judging loans by payment alone. Two loans with identical payments can have different terms and total interest — look at total cost.
- Assuming extra payments count without asking. Confirm extra money goes to principal, or the lender may apply it to future interest.
This is the same math that powers the auto loan calculator with its full amortization schedule. If you’re deciding whether paying down debt beats investing, compare the loan rate with the growth the investment calculator projects.