Loan calculator: monthly payment and total interest
Enter the amount, the annual interest rate and the term. A $25,000 loan at 6.5% for 5 years costs $489.15 a month, $29,349.22 in total and $4,349.22 in interest.
Inputs used by this calculator
Loan Calculator uses the fields below. The starting values reproduce the page example; replace them with values from the same units and time period before using the result.
| Input | Starting example | Accepted value | How it is used |
|---|---|---|---|
| Loan amount | 25,000 | 0 or greater | Supplies the loan amount quantity used by the published equation or result breakdown. |
| Annual interest rate (%) | 6.5 | 0 to 100 | Supplies the annual interest rate (%) quantity used by the published equation or result breakdown. |
| Loan term (years) | 5 | 0 to 100 | Supplies the loan term (years) quantity used by the published equation or result breakdown. |
What this calculator answers
It gives the fixed monthly payment for an installment loan — a personal loan, a car loan or any loan repaid in equal monthly amounts — plus the total you will pay and the interest part of that total. Use it to compare offers or to see what a shorter or longer term does to the cost.
The payment formula
Equal monthly payments come from the standard amortization formula. The monthly rate is the annual rate divided by 12 and the number of payments is the term in months. At a 0% rate, the payment is simply the amount divided by the number of months.
payment = P × r ÷ (1 − (1 + r)^−n)total paid = payment × ninterest = total paid − PInterest rate versus APR
The CFPB explains that the interest rate is the cost of borrowing the principal, while the APR also includes fees charged by the lender. Two loans with the same rate can have different APRs. This calculator uses the interest rate; compare APRs on the lenders' disclosures, or use the APR Calculator to fold fees in.
Shorter versus longer terms
A longer term lowers the payment but increases the total interest. For $25,000 at 6.5%, stretching from 3 to 7 years cuts the payment by about $395 but more than doubles the interest. The table below shows the trade-off for each term.
How amortization works
Each month, interest is charged on the remaining balance and the rest of the payment reduces principal. The CFPB notes that early payments go mostly to interest, and principal falls faster toward the end. Paying extra toward principal shortens the loan and reduces interest, if the lender applies it that way and there is no prepayment penalty.
What the estimate leaves out
Origination fees, insurance products, late fees and variable rates are not included. For a car purchase, the Auto Loan Calculator adds sales tax, trade-in and down payment; for a home, use the Mortgage Calculator.
A $25,000 loan at 6.5% by term
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 2 years | $1,113.66 | $1,727.75 | $26,727.75 |
| 3 years | $766.23 | $2,584.10 | $27,584.10 |
| 4 years | $592.87 | $3,457.94 | $28,457.94 |
| 5 years | $489.15 | $4,349.22 | $29,349.22 |
| 6 years | $420.25 | $5,257.87 | $30,257.87 |
| 7 years | $371.24 | $6,183.82 | $31,183.82 |
Frequently asked questions
How is a monthly loan payment calculated?
With the amortization formula: payment = P × r ÷ (1 − (1 + r)^−n), using the monthly rate and the number of months.
How much is a $25,000 loan per month?
At 6.5% for 5 years, $489.15 a month.
Does a longer term save money?
It lowers the payment but increases total interest.
What is the difference between interest rate and APR?
The APR includes lender fees as well as interest, so it reflects more of the borrowing cost.
Can I pay off the loan early?
Usually, but check for prepayment penalties. Extra principal payments reduce total interest.
Why is most of my first payment interest?
Interest is charged on the full balance at the start, so the interest share is largest in early payments.
Does this include fees?
No. Add fees with the APR Calculator or compare the lenders' disclosed APRs.
What to keep in mind
Assumes equal monthly payments and a fixed rate. Fees, taxes and prepayments are excluded.
Results are rounded for display in US format, with money in dollars and cents; CSV exports keep full calculation precision. This is a calculation summary, not an official certificate.