Loan Calculator
Most consumer loans have no prepayment penalty
One-time, included in total cost
Term
Monthly payment
$606.86
5-year loan · last payment Oct 2031
Total interest
$6,411
21.37% of principal
Total cost
$36,411
principal + interest + fees
Amortization by year
| Year | Principal paid | Interest paid | Balance left |
|---|---|---|---|
| Year 1 | $5,094 | $2,188 | $24,906 |
| Year 2 | $5,511 | $1,771 | $19,394 |
| Year 3 | $5,963 | $1,319 | $13,431 |
| Year 4 | $6,452 | $831 | $6,980 |
| Year 5 | $6,980 | $302 | $0 |
Fixed rate at 7.90% APR.
Car loan, personal loan, consolidation — enter the amount, rate and term to see the real monthly payment and the total cost, and how much one extra payment a month shaves off both. The rate-sensitivity table below is the part most lenders would rather you skipped.
An amortized loan spreads principal and interest across equal payments: early payments are mostly interest, later ones mostly principal. Two levers set the total cost — the rate and the term. The term is the one dealers and lenders love to stretch, because halving the monthly payment feels like relief while quietly doubling the interest feels like nothing at all.
M = P · r / (1 − (1 + r)^−n)- M
- monthly payment
- P
- amount borrowed
- r
- monthly rate (APR ÷ 12)
- n
- number of payments
Worked example: $30,000 over five years at 7.9%
The payment comes to about $607 a month. Over 60 months that is $36,411 repaid on $30,000 borrowed — $6,411 in interest, or 21% of the principal. Stretch the same loan to seven years and the payment drops to about $466, but total interest rises to roughly $9,150: a $140 monthly saving that costs about $2,740 in extra interest.
| APR | Monthly payment | Total interest |
|---|---|---|
| 5.9% | $579 | $4,718 |
| 7.9% | $607 | $6,411 |
| 9.9% | $636 | $8,159 |
| 12.9% | $681 | $10,858 |
The APR is the number to compare, not the interest rate
A quoted rate excludes origination fees, documentation fees and any required add-ons. The APR folds those into a single annualised cost, which is why two offers at 7.9% can differ by a full point once fees are included. On a $30,000 loan, a $900 origination fee is worth roughly 0.6 percentage points of APR over five years — enough to erase a small rate advantage.
Extra payments on an installment loan
Most consumer loans have no prepayment penalty, which makes extra payments unusually effective here. On the $30,000 loan above, an extra $100 a month cuts the term by about a year. On credit card debt at 20%+, the same logic is even louder: the guaranteed return from killing 22% interest beats any realistic market return. "Pay the highest rate first" isn't a slogan. It's arithmetic.
What to check before signing
- The APR, not the advertised rate — and whether the fee is financed into the principal.
- Prepayment penalties, which quietly remove the benefit of paying early.
- Whether the rate is fixed or variable, and what the cap is if variable.
- Total cost of credit, disclosed under Truth in Lending — compare that single figure across offers.
- Dealer-arranged financing versus a pre-approved bank loan; the former is often marked up.
Sources & review
Reviewed by The Numberridge Editorial Team
Fact-checked · methodology documented
APR calculations and origination-fee treatment follow CFPB definitions.
Last updated October 2026
Frequently asked questions
How is a loan payment calculated?
With the amortization formula M = P·r ÷ (1 − (1+r)^−n), where P is the amount borrowed, r the monthly rate and n the number of payments. Every payment is identical, but the split between interest and principal shifts each month as the balance falls.
Why is total interest so much higher on longer loans?
Two reasons compound: a longer term means more payments, and each payment carries interest for longer. Doubling a five-year loan to ten years roughly halves the monthly payment but nearly doubles total interest. On $30,000 at 7.9%, five years costs about $6,400 in interest; seven years costs about $9,150.
What is the difference between interest rate and APR?
The interest rate applies only to the principal. APR folds in origination, documentation and other required fees, expressing total borrowing cost as an annual rate. Two offers at the same rate can differ by a full point of APR once fees are included, so compare APR when shopping.
Do extra payments reduce the term or the payment?
On most consumer loans, extra money goes to principal and shortens the term while the scheduled payment stays the same. Some lenders instead re-amortize to lower the payment — ask which applies, because shortening the term is what saves the interest.
Is there a prepayment penalty?
Most personal and auto loans have none, but some do, particularly subprime auto loans and certain personal loans. A prepayment penalty removes the entire benefit of paying early, so check the contract before making extra payments a core part of your plan.
Should I pay off debt or invest?
Compare the guaranteed after-tax return from eliminating the debt against the expected return from investing. Paying off a 20% credit card is a guaranteed 20% return and almost always wins. A 4% auto loan is a closer call and depends on your risk tolerance and liquidity.
Does this calculator include origination fees?
Yes, if you enter them. The fee is added to total cost and reflected in the effective annual cost figure, since fees financed into the principal quietly raise the real rate you pay without changing the quoted one.
How does a longer term affect affordability?
It lowers the monthly payment but keeps you in debt longer and increases the chance of going underwater on a depreciating asset like a car. A useful check: the payment should fit your budget with room for repairs, insurance and a reserve, not just fit this month.
Still unsure? Ask us a question — we answer within two business days.
Related calculators
The same numbers, from a different angle.
Loans & Debt
Credit Card Payoff Calculator
How long to clear a card balance at your payment level, what it costs, and what minimum payments really do.
Mortgage
Mortgage Calculator
Full PITI payment, PMI, total interest, payoff date and a year-by-year amortization schedule.
Investing
Compound Interest Calculator
Project growth from a lump sum plus recurring contributions, with real (inflation-adjusted) values.