Loan Calculator
Principal, interest, extra payments & amortization
| Year | Principal Paid | Interest Paid | Remaining Balance |
|---|---|---|---|
| Year 1 | $4,467 | $1,264 | $20,533 |
| Year 2 | $4,719 | $1,012 | $15,814 |
| Year 3 | $4,985 | $745 | $10,829 |
| Year 4 | $5,266 | $464 | $5,563 |
| Year 5 | $5,563 | $167 | $0 |
Loan Calculator: Monthly Payments, Interest Breakdown & Amortization Schedule
The Loan Calculator is a powerful financial tool designed to help users calculate monthly loan payments, total interest, and complete repayment breakdowns based on loan amount, interest rate, and loan term. It also allows users to include extra monthly payments to see how quickly they can reduce debt and save interest.
This calculator provides a full financial overview including an amortization schedule, payoff date estimation, yearly breakdown, and a visual pie chart showing how much of the total payment goes toward principal versus interest.
It is especially useful for understanding the real cost of borrowing money before taking any loan. Whether you are planning a home loan, car loan, personal loan, or business financing, this tool helps you make better financial decisions.
By adjusting interest rate, loan term, and extra payments, users can compare different repayment scenarios and choose the most cost-effective option. It simplifies complex financial calculations into an easy, visual, and user-friendly format.
Quick answer: a $25,000 loan at 5.5% over 5 years has a monthly payment of about $477.53 and costs $3,652 in total interest. Adding $100 a month in extra payments cuts the interest to $2,930 and pays the loan off 11 months sooner.
What Is a Loan?
A loan is a financial arrangement where a lender provides money to a borrower with the expectation that it will be repaid over time with interest. The borrowed amount is called the principal, and the additional cost paid to the lender is called interest.
Loans are commonly used for purchasing homes, cars, education, or covering personal and business expenses. Repayment is usually done in monthly installments over a fixed period known as the loan term.
Each installment consists of two parts: Principal, the original borrowed amount being repaid, and Interest, the cost charged by the lender for borrowing money. In the beginning of a loan, most of the payment goes toward interest. Over time, more of the payment goes toward reducing the principal.
What Is Loan Amortization?
Loan amortization is the process of repaying a loan through fixed monthly payments over a specific period of time. Each payment is divided between interest and principal, gradually reducing the loan balance until it becomes zero.
An amortization schedule shows how each payment is split over time, including the amount paid toward principal, the amount paid toward interest, and the remaining loan balance after each payment. This helps borrowers clearly understand how their loan decreases over time. The schedule on this page is shown year by year, and the amortization calculator can break it down further.
Loan Payment Formula
The monthly payment comes from the standard amortization formula, where P is the loan amount, r is the monthly interest rate (the annual rate divided by 12) and n is the number of monthly payments:
This table shows how the loan term changes the cost of the same $25,000 loan at 5.5%. A longer term lowers the monthly payment, but you pay more interest overall:
| Loan term | Monthly payment | Total interest | Total repaid |
|---|---|---|---|
| 3 years | $754.90 | $2,176 | $27,176 |
| 5 years | $477.53 | $3,652 | $28,652 |
| 7 years | $359.25 | $5,177 | $30,177 |
| 10 years | $271.32 | $7,558 | $32,558 |
How Extra Payments Save Interest
Any extra amount you add each month goes straight to the principal, so the balance falls faster and less interest builds up. On the $25,000 loan above, an extra $100 a month saves $721 in interest and removes 11 months from the loan. Enter an amount in the extra payment field to see the new payoff date and time saved. For specific loans, you can also try the mortgage calculator, the auto loan calculator or the interest calculator.
What This Calculator Does Not Include
The results cover principal and interest on a fixed-rate loan. Property tax, insurance, fees, penalties and rate changes are not included, and a lender's own figures may differ slightly because of rounding or payment dates. Use the numbers as an estimate for planning and comparison, not as financial advice.
Who Should Use This Calculator?
Home buyers calculating mortgage payments, car buyers comparing auto loans, students planning education loans, business owners managing financing costs, individuals planning personal loans, financial advisors and planners, and anyone comparing bank loan offers.
How to Use This Calculator
Enter Loan Amount
Input the total amount you want to borrow from a lender.
Enter Interest Rate
Add the annual interest rate offered by your bank or financial institution.
Select Loan Term
Choose the number of years over which you plan to repay the loan.
Add Extra Monthly Payment (Optional)
Enter additional monthly payment to reduce loan duration and save interest.
Click Calculate Loan
The calculator will instantly display monthly payment, total interest, total repayment, and payoff date.
View Results
Check amortization schedule, yearly breakdown, and pie chart showing principal vs interest distribution.