Monthly Payment Calculator
Calculate the monthly payment on any fixed-rate loan, see total interest paid, and instantly check how a 1% rate increase changes your payment.
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How to use this calculator
M = monthly payment, P = principal, r = monthly rate (annual ÷ 12), n = total months (years × 12).
- 1
Enter the loan amount (principal).
- 2
Enter the annual interest rate as quoted by your lender.
- 3
Enter the loan term in years.
- 4
The calculator shows your monthly payment, total interest, and a first-month breakdown of principal vs interest.
Frequently asked questions
What is included in a loan payment?
Each payment has two components: principal (reducing the outstanding balance) and interest (cost of borrowing). Early in the loan, most of the payment is interest; later, most goes to principal. This calculator shows the pure P&I payment — for mortgages, add property tax, insurance, and PMI for the full PITI payment.
How much does a longer term reduce my payment?
On a $25,000 / 7.5% loan: 3-year term = $777/month, total interest = ~$3,977. 5-year term = $501/month, total interest = ~$5,039. 7-year term = $381/month, total interest = ~$7,018. The monthly payment drops significantly but total interest cost climbs substantially.
What happens if I make an extra payment?
Any payment above the required minimum goes entirely to principal, reducing the balance faster. On a 5-year / 7.5% / $25,000 loan, adding $100/month extra reduces the payoff time by about 10 months and saves roughly $650 in interest.
How does a 1% rate change affect my payment?
The calculator shows this directly. As a rule of thumb, a 1% rate increase adds roughly $5–8 per month per $10,000 borrowed on a 5-year term, and $6–10 per $10,000 on a 30-year mortgage.
Loan payment fundamentals
The amortization effect: why early payments are mostly interest
In a standard amortizing loan, the monthly payment is fixed, but the split between interest and principal changes each month. Month 1, the interest charge is highest (balance × monthly rate). As you pay down principal, the interest portion shrinks and the principal portion grows. By the final payment, nearly all of it is principal.
Comparing payment options across lenders
Use the payment calculator to normalize all loan offers to a consistent comparison. Enter the same principal and term but different rates to see the monthly difference. A 0.5% rate difference on a $300,000 mortgage is roughly $90/month — or about $32,000 over 30 years. Small rate differences matter enormously on large, long-term loans.
Making additional principal payments
Any payment beyond the scheduled amount reduces the principal balance immediately. This has two benefits: it reduces future interest charges (calculated on the remaining balance) and shortens the loan term. Even one extra payment per year significantly accelerates payoff. Set up auto-payments for consistency — many servicers allow you to specify extra principal with each payment.
Learn more from an authoritative source:
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →