Payment Calculator
Calculate your monthly loan payment from principal, interest rate, and loan term using the standard amortization formula.
About this Calculator
Calculate your monthly loan payment from principal, interest rate, and loan term using the standard amortization formula.
Formula & Calculations
Formula
M = P [ i(1+i)^n ] / [ (1+i)^n - 1 ]Where:
- M=Monthly payment amount
- P=Principal loan amount
- i=Monthly interest rate (annual rate divided by 12)
- n=Total number of monthly payments
Assumptions
- Assumes fixed interest rate throughout the loan term.
- Assumes monthly compounding and equal monthly payments.
- Does not include taxes, insurance, or other fees.
Calculation Examples
Example 1
A $25,000 loan at 6% APR over 5 years (60 payments) results in a monthly payment of $483.32.
Example 2
With 0% interest, the payment is simply the principal divided by the number of months.
Frequently Asked Questions
What is an amortization schedule?
An amortization schedule is a table showing each payment broken down into principal and interest portions. Early payments are mostly interest and later payments are mostly principal.
How does the loan term affect total interest paid?
A longer loan term results in lower monthly payments but significantly more total interest paid over the life of the loan because interest accrues over a longer period.