How this calculator works
Fixed-rate installment loans (personal, student, auto and many business loans) are repaid in equal monthly payments. Each payment covers that month’s interest first; the rest reduces the balance.
The payment is loan × r ÷ (1 − (1 + r)^−n), with r the monthly rate and n the number of months. At a 0% rate it is simply the loan divided by the months.
Early payments are mostly interest and later ones mostly principal, which the yearly schedule shows.
Use the loan’s APR if it includes fees, so the total cost is realistic.
Worked example
$25,000 at 9% for 5 years
- Monthly rate: 9% ÷ 12 = 0.75%; 60 payments.
- Monthly payment: $518.96.
- Total interest: $6,137.53, so you repay $31,137.53 in total.
Questions people ask
How can I lower my monthly payment?
Borrow less, choose a longer term or get a lower rate. A longer term lowers the payment but increases total interest.
Does paying extra reduce interest?
Yes. Extra principal lowers the balance that interest is charged on. Check the loan has no prepayment penalty.
What is the difference between interest rate and APR?
The rate sets your payment; the APR also includes upfront fees spread over the term, so it is the better number for comparing offers.
Last reviewed October 2, 2026