What Is a Loan Calculator?
A loan calculator estimates monthly payments, total repayment costs and total interest for a loan based on the amount borrowed, interest rate and repayment term.
How Loan Payments Work
Most loans are repaid through fixed monthly installments that include both principal and interest.
Understanding Principal and Interest
The principal is the amount borrowed, while interest represents the cost of borrowing money from a lender.
How Interest Rates Affect Loans
Higher interest rates increase monthly payments and total borrowing costs over the life of the loan.
Practical Example
A $20,000 loan with a 6% annual interest rate repaid over 60 months will have a different monthly payment than the same loan repaid over 36 months.
Short-Term vs Long-Term Loans
Shorter repayment terms generally result in higher monthly payments but lower total interest costs.
Common Types of Loans
Loan calculators can be used for personal loans, auto loans, student loans, business loans and many other financing options.
Using This Loan Calculator
Enter the loan amount, annual interest rate and repayment period to estimate monthly payments and total loan costs.