Loan Calculator — Monthly Payment, Interest & Amortization Schedule

A fixed (annuity) payment is an equal monthly amount that stays the same for the entire loan term. It includes both principal and interest. Early in the loan, most of the payment goes toward interest; later, more goes toward principal. Formula: PMT = P × [i×(1+i)^n] / [(1+i)^n − 1], where P = loan amount, i = monthly rate (annual ÷ 12 ÷ 100), n = number of months. Advantages: easy to budget, predictable. Downside: you pay more total interest than with declining balance. Best for: mortgages, auto loans, personal loans where budget predictability matters.

With declining balance payments, the principal portion is divided equally across all months, while interest is calculated on the remaining balance each period. So the first payments are the highest and decrease over time. Calculation: principal portion = P ÷ n (fixed), monthly interest = remaining balance × (annual rate ÷ 12 ÷ 100). Advantages: lower total interest paid. Downside: higher initial payments, harder to budget. Best for: borrowers with high income who want to minimize total cost, or those planning early payoff.

The APR is the true annual cost of borrowing expressed as a percentage. Unlike the nominal interest rate, APR includes all mandatory fees — origination fees, monthly service charges, and other costs. In the US, lenders are required to disclose APR under the Truth in Lending Act (TILA / Regulation Z). APR is calculated using the Internal Rate of Return (IRR) method: finding the rate at which the present value of all payments equals the loan amount. If the nominal rate is 8% but there's a 2% origination fee, the real APR will be higher. Always compare APR across lenders — not just the advertised interest rate.

Total cost = principal + interest + fees. Origination fee: a one-time charge at loan disbursement (typically 0.5–6% of the loan amount). Monthly service fee: a fixed dollar amount or percentage of the remaining balance charged every month. Insurance: required for mortgages (PMI if under 20% down) and some auto loans. Appraisal fees for real estate. This calculator accounts for one-time and monthly fees — the two most common extra charges lenders add.

The Federal Reserve sets the federal funds rate — the benchmark that influences borrowing costs across the economy. When the Fed raises rates, banks increase their lending rates; when it cuts, loans get cheaper (with a lag of weeks to months). Most consumer loan rates are priced as: prime rate + lender margin. The prime rate typically tracks the fed funds rate plus 3%. For example, a personal loan might be priced at prime + 5–15%, while a mortgage might be prime + 1–3%. Tracking Fed rate decisions helps you time major borrowing decisions.

Declining balance payments result in lower total interest because interest is charged on a shrinking balance. But your initial payments are higher. Fixed (annuity) payments are easier to budget since the amount never changes. If you plan to pay off early, declining balance is cheaper. If you want predictable monthly costs, go with fixed. Enter your loan details above and switch between types — the difference in total interest will be shown instantly.

For fixed payments: PMT = P × [i×(1+i)^n] / [(1+i)^n − 1], where P = loan amount, i = monthly rate (annual rate ÷ 12 ÷ 100), n = number of months. Example: $20,000 loan, 8% annual (i = 0.00667), 48 months. PMT = 20000 × [0.00667 × (1.00667)^48] / [(1.00667)^48 − 1] ≈ $488.26/month. Or just use the calculator above for instant results with a full amortization schedule.

As of 2025-2026: personal loans 7–24% APR depending on credit score. Auto loans (new): 4–8%. Auto loans (used): 6–12%. Mortgages (30-year fixed): 6–7.5%. Home equity / HELOC: 7–10%. Credit cards: 18–28%. Always ask for the APR — it reflects the full cost including fees.

An origination fee is a one-time charge when the loan is issued — typically 1–6% of the loan amount. It raises your real APR without changing the monthly payment. A monthly service fee is a fixed dollar amount added every month. It increases both your monthly outlay and total cost. Example: a $20,000 loan at 10% for 3 years + 0.5% monthly fee on the balance can push the real APR above 16%. Always check the loan agreement for hidden fees.

Usually yes, especially with fixed payments. In early months, most of your payment is interest. Extra payments reduce the principal faster, which cuts the interest that accrues in future months. Most US personal and auto loans have no prepayment penalties (verify in your agreement). With declining balance, the effect is smaller since interest already decreases naturally. Try recalculating with a shorter term to see how much interest you'd save.

An amortization schedule is a month-by-month table showing: your payment amount, how much goes to principal, how much to interest, and the remaining balance after each payment. It helps you see exactly where your money goes and plan extra payments strategically. US lenders are required to provide this before you sign. This calculator generates a full schedule you can copy into Excel or Google Sheets.

Compare the APR (Annual Percentage Rate) — it factors in everything: interest, origination fees, and monthly charges. A loan at 10% with a 3% origination fee may cost more than a 12% loan with no fees. Enter both loans into the calculator and compare "Total Paid" — that's the simplest way to see which is cheaper overall.

The US prime rate is a benchmark used by banks to set variable-rate loans. It's typically the federal funds rate + 3%. Many personal loans, HELOCs, and credit cards are priced as "prime + X%." When the Fed raises rates, the prime rate goes up, and so do variable-rate loan payments. Fixed-rate loans are not affected after closing. Always ask whether your rate is fixed or variable.