Loan Calculator
Last reviewed on October 1, 2026.
Calculate monthly payments, total interest, and amortization schedules for any type of loan. Compare different loan options, understand the impact of extra payments, and make informed borrowing decisions.
Loan Details
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Extra Payments (Optional)
Understanding Loans
How Interest Works
Loan interest is calculated on the remaining principal balance. Early in the loan, most of your payment goes to interest. As the balance decreases, more goes to principal. This is why extra payments early in the loan save the most money.
The 28/36 Rule
Lenders typically want your housing payment below 28% of gross monthly income and total debt payments below 36%. For a $6,000/month income, that's $1,680 for housing and $2,160 for all debt payments.
Points vs Rate
Mortgage points let you buy a lower rate. One point costs 1% of the loan amount and often lowers the rate by about 0.25% (it varies by lender). Points make sense if you'll keep the loan long enough for interest savings to exceed the upfront cost.
When to Refinance
Consider refinancing when rates drop 0.75-1% below your current rate. Factor in closing costs (often 2-5% of the loan amount) and how long you'll stay in the home. Divide closing costs by the monthly savings to find your break-even point in months.
Types of Loans
| Loan Type | Example APR* | Typical Term | Best For |
|---|---|---|---|
| 30-Year Mortgage | 7.32% | 30 years | Lower monthly payments, flexibility |
| 15-Year Mortgage | 6.75% | 15 years | Faster equity, less total interest |
| Auto Loan (New) | 7.5% | 3-7 years | New vehicle purchases |
| Auto Loan (Used) | 8.75% | 3-5 years | Used vehicles 1-5 years old |
| Personal Loan | 12.5% | 2-7 years | Debt consolidation, home improvement |
| Student Loan (Federal) | Set each July 1 | 10-25 years | Education expenses |
| Student Loan (Private) | 7-14% | 5-20 years | When federal aid insufficient |
| HELOC | 8.5% | 10-20 years | Home equity access, renovations |
*Illustrative rates for comparison only. Actual rates change often and depend on your credit, down payment, and lender, so get current quotes before deciding.
Strategies to Pay Off Loans Faster
- Bi-weekly payments: Make half your monthly payment every two weeks (26 half-payments = 13 full payments/year). On a $200,000, 30-year loan at 6%, that alone pays it off about 5.5 years early.
- Round up payments: Round $1,847 to $1,900 or even $2,000
- Annual bonus: Apply tax refunds, bonuses directly to principal
- Refinance to shorter term: Move from 30 to 15 years when affordable
- Target highest rate first: Pay minimums on all, extra on highest APR
- Recast your mortgage: Large principal payment to lower monthly amount
Frequently Asked Questions
How is a monthly loan payment calculated?
Fixed-rate loans use the standard amortization formula: payment = P × r(1+r)n ÷ ((1+r)n − 1), where P is the loan amount, r is the annual rate divided by 12, and n is the number of months. For example, $200,000 at 6% for 30 years works out to $1,199.10 a month, and about $231,677 in total interest over the life of the loan. At a 0% rate the payment is simply the amount divided by the months.
How much do extra payments save?
Every extra dollar goes straight to principal, so it stops accruing interest for the rest of the loan. On that same $200,000 loan at 6%, switching to bi-weekly half-payments (one extra monthly payment a year) pays it off in about 24.5 years instead of 30 and saves roughly $49,600 in interest. Enter your own numbers in the Extra Payments section above to see your savings and new payoff date.
Should I pay off my mortgage early?
It depends on your rate and alternatives. If your mortgage is 4% and you can earn 7% investing, investing may be better. However, being debt-free provides psychological benefits and guaranteed savings on interest.
Should I choose a fixed or variable rate?
Fixed rates provide payment stability and protection from rate increases. Variable rates often start lower but can rise when market rates do. For long loans like a 30-year mortgage, a fixed rate removes the risk of your payment jumping later.
How much can I afford to borrow?
Use the 28/36 rule: housing payment ≤ 28% of gross monthly income, total debt ≤ 36%. Also ensure you have 3-6 months emergency fund after down payment and closing costs.
What credit score do I need?
Lenders generally reserve their best rates for scores in the mid-700s and up. You can qualify with lower scores but will usually pay a higher rate. FHA mortgages allow scores of 580+ with 3.5% down.