Loan Calculator
A monthly payment, the total interest, and the exact date the balance hits zero — for a car loan, a personal loan, a student loan, or anything else amortized at a fixed rate.
Cost of the loan
- Principal $0
- Interest $0
Balance, principal and interest by year
- Principal
- Interest
- Remaining balance
Payment schedule
| # | Date | Payment | Principal | Interest | Extra | Balance |
|---|
How a fixed-rate loan payment is built
Every installment loan with a fixed rate uses the same formula. The payment is set so that the loan balance reaches exactly zero on the last scheduled date, given the rate and the number of months. Interest is calculated on the outstanding balance each month, and whatever remains of the payment reduces principal.
Two consequences follow, and they explain most of what borrowers find surprising:
- A longer term lowers the payment but raises the cost. Stretching a $32,000 loan at 7.25% from 5 to 7 years cuts the monthly payment by about $151 but adds roughly $2,650 of interest. On cars, the risk is compounded by depreciation: a 7-year loan on a vehicle that loses half its value in four years leaves you owing more than the car is worth.
- The rate matters more than the term on short loans, less on long ones. A 1-point rate cut on a 5-year, $32,000 loan saves about $15 a month. The same cut on a 30-year mortgage saves roughly $220 a month. Scale changes the sensitivity.
APR is not the interest rate
The interest rate determines the payment. The APR folds in origination fees, dealer fees and other finance charges, so it is always equal to or higher than the note rate and is the number to compare across offers. A 6.9% loan with a $700 origination fee can carry a 7.6% APR and cost more than a 7.1% loan with no fees — which is why the "fees financed" box above exists.
Where the money goes
On a 5-year loan at 7.25%, about 16% of everything you pay is interest. On a 7-year loan it is closer to 22%. The donut above shows the split for your numbers. If that share feels high, the fastest fix is a shorter term or a lower rate, not a bigger down payment — the down payment reduces the amount borrowed, which helps, but it does not change the cost per dollar borrowed.
Loan calculator FAQ
Short answers to the questions that come up most.
What is the difference between this and a mortgage calculator?
Nothing in the math — both amortize a fixed-rate loan. The mortgage calculator adds property tax, homeowners insurance, HOA dues and PMI, and models the 15/20/30-year terms that mortgages use. This page handles shorter consumer loan terms without the escrow fields.
Should I finance fees into the loan?
Only if you would otherwise pay them with a credit card or drain your emergency fund. Financing a $700 fee over 60 months at 7.25% costs about $14 in interest — trivial. The real risk is negative equity when fees are rolled into a car loan with no down payment.
How much car can I afford?
A common guideline is 10–15% of gross monthly income for the payment, including insurance. On $5,000 a month that is $500–$750. Keep the loan at 60 months or less, put at least 10% down, and check the insurance quote before signing — premiums on a new car can add $100–$200 a month.
Does making extra payments on an auto loan help?
Yes, and it is usually simpler than on a mortgage because there is no escrow to confuse the accounting. Most auto loans have no prepayment penalty. Paying $100 extra on a $32,000 5-year loan at 7.25% saves about $1,020 in interest and shortens the term by roughly nine months.
Why is my first payment higher than the calculator says?
Because of per-diem interest. If the loan funds on the 20th but the first payment is due on the 1st, the first installment often includes interest for a partial month. Some lenders defer the first payment instead. Neither changes the total interest much; both change the first statement.
Is a 0% APR loan really free?
Only if the price is the same as the cash price. Manufacturer financing at 0% often replaces a $2,000–$4,000 rebate, which means you are paying the interest upfront in the purchase price. Compare the rebate-plus-bank-loan option against 0% financing before deciding.
Related calculators
Different loan, same math.
Estimates assume a fixed rate, monthly payments and no prepayment penalty. They exclude insurance, registration, taxes and any fees not entered above. Dealer and lender quotes will differ.