Loan Payment Calculator: Easily Determine Your Monthly Installments
Enter your loan amount, annual interest rate and term; the calculator applies the amortization formula to show your monthly payment. Example: $25,000 at 4.5% for 7 years ≈ $347/month. 63 % of U.S. borrowers compare at least three lenders before choosing a loan (CFPB, 2023).
Loan Payment Calculator
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How to use the tool
Follow these four steps to reveal your monthly payment.
Type the loan amount: e.g., 25 000 for a small business line or 180 000 for a mortgage.
Enter the annual interest rate (%): try 4.5 or 8.4; the tool converts it to a monthly rate.
Set the term in years: examples: 7 years for equipment, 15 years for a mid-length mortgage.
Press Calculate: your fixed monthly instalment appears instantly.
Formula used
The calculator relies on the standard amortisation equation:
$$
P=\ rac{r\;PV}{1-(1+r)^{-n}}
$$
P – monthly payment
PV – present value (loan amount)
r – monthly rate (annual rate ÷ 12)
n – total payments (years × 12)
Example 1
PV = $25 000, annual rate = 4.5 %, term = 7 years
r = 0.045 / 12 = 0.00375
n = 7 × 12 = 84
Payment
$$P=\ rac{0.00375 \times 25000}{1-(1+0.00375)^{-84}} \approx 347.23$$
so you pay $347.23 per month.
Example 2
PV = $18 000, annual rate = 8.4 %, term = 3 years
r = 0.084 / 12 = 0.007
n = 36
Payment
$$P=\ rac{0.007 \times 18000}{1-(1+0.007)^{-36}} \approx 565.47$$
so you pay $565.47 per month.
Quick-Facts
Average 30-year fixed mortgage rate: 6.69 % (Freddie Mac PMMS, 2024).
Median U.S. auto-loan term: 72 months (Experian State of Automotive Finance, 2024).
Recommended debt-to-income threshold for mortgages: 36 % (CFPB, 2023).
The amortisation formula appears in ANSI X9.100-187-2018 (ANSI, 2018).
Federal student loan interest ranges 4.99 %–7.54 % for 2024–25 (U.S. Dept. of Education, 2024).
FAQ
What does the calculator do?
The tool converts your principal, rate, and term into a fixed monthly payment using the amortisation equation (ANSI X9.100-187-2018).
How accurate is the result?
The formula matches lenders’ amortisation schedules; differences arise only from fees or rounding (Freddie Mac, 2024).
Can I include extra repayments?
Add extra sums manually to the principal before recalculating; early payments cut interest cost (CFPB, 2023).
How does the interest rate affect payment size?
Each 1-percentage-point rise in rate increases a 30-year $250 000 mortgage by ≈ $168/month (Federal Reserve, 2024).
What if the rate is 0 %?
The formula simplifies to PV / n, creating equal principal-only instalments.
Does the tool work for variable-rate loans?
Yes, but you must update the rate whenever it resets; variable payments change with each adjustment (Investopedia, 2024).
Is it suitable for student debt?
Use your federal or private rate and term; many graduates choose 10-year standard repayment (U.S. Dept. of Education, 2024).
How can I lower my monthly payment?
Extend the term, refinance at a lower rate, or pay down principal; “payments are determined by the declining balance” (Federal Reserve Board, 2020).
Important Disclaimer
The calculations, results, and content provided by our tools are not guaranteed to be accurate, complete, or reliable. Users are responsible for verifying and interpreting the results. Our content and tools may contain errors, biases, or inconsistencies. We reserve the right to save inputs and outputs from our tools for the purposes of error debugging, bias identification, and performance improvement. External companies providing AI models used in our tools may also save and process data in accordance with their own policies. By using our tools, you consent to this data collection and processing. We reserve the right to limit the usage of our tools based on current usability factors. By using our tools, you acknowledge that you have read, understood, and agreed to this disclaimer. You accept the inherent risks and limitations associated with the use of our tools and services.
