How this calculator works
M = P·r / (1 − (1+r)^−n). Total interest = M·n − P. This is the same formula banks use for any fixed-rate installment loan.
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Loan Payment Calculator — Any Loan, Any Term
A universal amortization calculator: enter the loan amount, annual rate and term to see the fixed monthly payment and the total cost of borrowing.
Scenario examples (2026 rates)
| Loan amount ($) | Monthly payment |
|---|---|
| 10,000 | $207.58 |
| 15,000 | $311.38 |
| 20,000 | $415.17 |
| 30,000 | $622.75 |
| 40,000 | $830.33 |
Every number above is computed by the same in-browser engine as the calculator — nothing is hardcoded.
Reading an amortization schedule
Every fixed-rate installment loan follows the same shape: a flat payment, interest that declines monthly, and principal that accelerates. On a $20,000 five-year loan at 9 percent, the payment is $415.17 and total interest is about $4,910. Month one splits that into $150 of interest and $265 of principal; by month 30 the split is roughly even; by month 59 only about $3 of interest remains. Two practical takeaways follow. First, the total interest figure is the true price of borrowing and belongs in every comparison, because a lender can lower your payment simply by adding years while raising that price. Second, because interest is charged on the declining balance, any extra payment applied to principal reduces every future interest charge. The same schedule also shows how little of your money has bought equity early on, which matters if you plan to sell the financed asset or refinance within the first two or three years.
Fixed rate versus variable rate loans
A fixed APR locks the payment for the whole term; a variable loan tracks an index such as the prime rate plus a margin and can reprice monthly or quarterly. Variable personal loans usually start one to three percentage points below comparable fixed offers, which is attractive until rates move. On $20,000 over five years, a 1 percent increase in rate adds about $9 to $10 per month; a 3 percent move adds close to $30 per month and nearly $1,500 over the remaining term, with no way to opt out. Variable pricing makes sense for short terms, under three years, where you are confident of payoff before meaningful resets, or when the index is falling and the loan carries a rate cap. For anything longer, or for a budget that cannot absorb a payment jump, fixed wins on certainty even when it costs a bit more at origination. This calculator models the fixed case; re-run it at a rate 2 to 3 points higher to stress-test a variable offer.
Prepayment and how to apply extra money correctly
Extra payments only help when the lender applies them to principal, and the default at many servicers is different: they may advance the next due date or spread the money across future interest. When you pay extra, state in writing that it is principal-only, and confirm on the next statement that the balance dropped by the full amount rather than the payment rescheduling. There are two styles of prepayment benefit. Some loans use simple interest with no penalty, where every extra dollar saves interest from that day forward; others carry a prepayment penalty of up to a few percent within the first year, disclosed in the truth-in-lending box. If the penalty exceeds the interest you would save by paying early, stay on schedule. A practical rule: an extra tenth of the balance per year, applied to principal, typically shortens a five-year loan by around a year and removes about a fifth of the total interest.
FAQ
Does extra payment reduce interest?
Yes — see the credit card payoff calculator to model extra payments; the same logic applies to installment loans if your lender applies extras to principal.
What APR should I use?
Your loan's APR (includes fees), not just the note rate. It's on the truth-in-lending disclosure.
What APR should I expect for a personal loan in 2026?
Rates track credit scores tightly. Borrowers in the 720 to 850 band see roughly 8 to 15 percent APR, the 660 to 719 band about 15 to 22 percent, and scores below 640 push past 25 percent, where the loan starts costing more than many credit cards. The average personal loan APR across all tiers has hovered near 12 percent in recent Federal Reserve data. On a $20,000 five-year loan, every percentage point of APR adds roughly $10 to $11 per month, so a two-point difference is over $1,200 across the term. Get quotes from three lender types, credit union, online lender, and your existing bank, within a two-week window so credit inquiries count as one for scoring purposes.
Does paying a loan off early hurt my credit score?
Temporarily and slightly, if at all. Closing an installment account shortens your average account age and reduces credit mix, and scores can dip a few points for a month or two before recovering. There is no penalty embedded in scoring models for paying off debt, and most modern personal loans have no prepayment penalty, though some still charge up to 2 to 5 percent, so read the truth-in-lending disclosure before signing. The interest saved by early payoff nearly always outweighs a few transient points. The exception: if you are within about six months of applying for a mortgage, avoid closing or opening accounts without asking your loan officer, because underwriting looks at recent account activity.
When does consolidating debts into one loan actually save money?
Only when the new APR is meaningfully below the blended rate of what you are consolidating, and the term is not stretched far enough to cancel the gain. Consolidating $20,000 of cards at a blended 22 percent into a 12 percent five-year loan cuts monthly interest from about $367 to $200 and saves thousands. The same loan stretched to seven years lowers the payment but can cost more total interest than aggressive card payoff. Use this calculator on the consolidation offer and on your current debts separately, and compare total interest, not monthly payment. A consolidation only works if the freed credit lines stay closed to new balances; roughly two in three consolidators re-accumulate card debt within three years.