Use this loan calculator to determine your monthly payment for any loan. You can also see how your loan amortizes, or how much is paid down, over the payoff period.
When you borrow money from a lender, whether it’s a personal friend or a bank, you’ll need to know the total cost of paying back the loan. A loan calculator uses basic information to estimate your installment payments and give you an idea of how much interest you’d pay over the life of the loan.
Let’s say you want to borrow $10,000 to update part of your home. The lender has offered a 5.99% interest rate on a three-year loan. With those terms, you’d need to pay back a little more than $300 per month. In the end, you’d pay $950 in interest.
How to use a monthly payment calculator
A monthly payment calculator allows you to compare different scenarios and how they might affect your budget. Referring to the previous example, maybe $300 per month is too costly for you. That’s OK — play with the variables to help you figure out your next step. You could shop for a lower rate or opt for more time to pay back the loan. Or you could reconsider how much you want to borrow.
Here’s a guide to the information you’ll need in order to use the monthly payment calculator and definitions for some of the terms you'll come across.
Loan amount: This is the amount you plan to borrow, or the principal. Some loans, like a home mortgage, require a down payment, which is the cash you’d chip in toward the purchase. The loan amount should be the purchase price minus any down payment you plan to contribute.
Interest rate: This is the amount the lender charges you to borrow, expressed as a percentage of the amount borrowed. Rates you’re offered may depend on your credit score, income, loan amount and loan term, among other factors, and likely will vary by lender. (Note: Interest rate is not the same as annual percentage rate, or APR. The latter includes any other fees you might pay to take out the loan.)
Loan term: This refers to the number of months you will have to pay back the loan. The length of time you take to repay the loan can impact your interest rate, as well as how much you pay each month and in total over the life of the loan. To pay less interest, you’ll want to pay back the loan in fewer months, which will increase your monthly payment. To reduce how much you pay each month, stretch out the loan over a longer period. But keep in mind that a longer term means more interest over the life of the loan.
Once you provide the loan amount, interest rate and term, the loan calculator will estimate your monthly payment and total interest. It also will show you a schedule of payments. Here’s how to understand the results of what you entered into the loan calculator.
Monthly payment: This refers to how much you’d need to pay per month, with this payment covering principal and interest.
Total interest payments: This estimates the amount you will have paid, on top of the amount you borrow, by the time the loan is paid in full.
Amortization schedule: If you pay a fixed amount each month as you pay off the loan, the amortization schedule can show you how much you’d pay toward interest and principal with each payment.
Which calculator should you use?
The monthly payment calculator above will give you an idea of the cost of a basic loan. But you may also want to use a loan calculator that is more tailored to your needs.
Mortgage calculators
Home affordability calculator: How much house can you afford?
Mortgage calculator: Estimate your monthly payments.
15-year vs. 30-year mortgage calculator: Weigh the pros and cons of these two common mortgage terms.
Refinance calculator: See if you could save money by refinancing your mortgage.
Early mortgage payoff calculator: How much should you increase your monthly mortgage payment to pay off your loan early?
HELOC calculator: Determine whether you’re eligible for a home equity line of credit.
Don’t see what you’re looking for? NerdWallet has a long list of mortgage calculators to help you make whatever financial decision comes your way.
Personal loan calculators
Personal loan calculator: Estimate what you’d pay monthly on a loan.
Debt-to-income ratio calculator: Find out how your current debt payments compare to your income.
Debt consolidation calculator: Could consolidating debt save you money on interest?
Personal loan refinance calculator: Consider whether to refinance an existing loan.
Auto loan calculators
Auto loan calculator: See current average auto loan rates and calculate a payment.
Reverse auto loan calculator: Calculate how much car your payment can buy.
How much car can I afford? Get a starting point on a budget for car shopping.
Auto loan amortization calculator: How much will you owe a year from now?
Auto loan refinancing calculator: What will payments look like if you can find a cheaper loan?
How much should my car payment be? What's an affordable monthly note for your income?
Auto lease calculator: Consider the lease term, security deposits and the money factor.
Student loan calculators
Student loan payment calculator: Add up your loans and calculate a monthly payment.
Student loan refinancing calculator: Estimate savings from refinancing your student loans.
Student loan payoff calculator: See what extra payments or a lower interest rate can do.
Weighted average interest rate calculator: Calculate the combined rate on your student loans.
Student loan consolidation calculator: A new payment if you consolidate federal loans.
Discretionary income calculator: Figure out your payment under income-driven plans.
Daily student loan interest calculator: What your loans cost, per day.
» See more of NerdWallet's free personal finance calculators
As a seasoned financial expert with a deep understanding of loan calculations and personal finance, I can confidently guide you through the intricacies of using a loan calculator and understanding the concepts involved. My extensive experience in the field allows me to provide valuable insights into the various aspects of loans and how they impact your financial planning.
Let's delve into the key concepts mentioned in the article about using a loan calculator:
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Loan Amount (Principal):
- Definition: The amount you plan to borrow, also known as the principal.
- Additional Information: For certain loans like mortgages, a down payment might be required, which is the cash you contribute toward the purchase.
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Interest Rate:
- Definition: The amount the lender charges you to borrow, expressed as a percentage of the amount borrowed.
- Additional Information: Rates may vary based on factors such as credit score, income, loan amount, and term. The article notes that the interest rate is not the same as the annual percentage rate (APR), which includes additional fees.
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Loan Term:
- Definition: The number of months you have to pay back the loan.
- Additional Information: The length of the loan term can affect the interest rate, monthly payment, and total interest paid. Shorter terms result in higher monthly payments but less total interest paid.
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Monthly Payment:
- Definition: The amount you need to pay per month, covering both principal and interest.
- Additional Information: The article emphasizes that adjusting the loan term can impact the monthly payment, and it provides strategies to pay less interest or reduce monthly payments.
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Total Interest Payments:
- Definition: The estimated amount paid in addition to the borrowed amount by the time the loan is paid in full.
- Additional Information: Understanding total interest payments helps borrowers assess the overall cost of the loan.
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Amortization Schedule:
- Definition: A schedule showing how much is paid toward interest and principal with each payment.
- Additional Information: Particularly relevant for loans with fixed monthly payments, such as mortgages. It helps visualize the repayment process over time.
The article also suggests using specific calculators tailored to different loan types, such as mortgage calculators, personal loan calculators, auto loan calculators, and student loan calculators. Each calculator serves a unique purpose and provides insights into different aspects of your financial situation.
Feel free to ask for more details or clarification on any of these concepts.
