Calculate your monthly loan payment, total interest, and see a full amortization schedule. Free, instant, no signup.
How Loan Payments Work
Most loans use compound interest with a fixed amortization schedule. Each monthly payment is split between paying down the principal (the amount you borrowed) and paying interest (the cost of borrowing). Early in the loan term, a larger portion goes toward interest; as the balance decreases, more of each payment goes toward principal.
The formula used here is the standard amortization equation:
M = P × [ r(1+r)n ] / [ (1+r)n − 1 ]
Where P is the principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the total number of months.
Fixed vs. Variable Rates
- Fixed-rate loans keep the same interest rate for the entire term, making budgeting predictable.
- Variable-rate loans have rates that change with market conditions, which can lower costs if rates drop but increase them if rates rise.
This calculator assumes a fixed interest rate. If you have a variable-rate loan, you can recalculate at any time by updating the rate field to see your new estimated payments.
Frequently Asked Questions
How is the monthly loan payment calculated?
The monthly payment is calculated using the standard amortization formula: M = P × [r(1+r)n] / [(1+r)n − 1], where P is the loan principal, r is the monthly interest rate, and n is the total number of months.
What is an amortization schedule?
An amortization schedule is a table that shows each monthly payment broken down into principal and interest portions, along with the remaining balance after each payment.
Does this calculator work for mortgages and car loans?
Yes, this calculator works for any fixed-rate installment loan including mortgages, car loans, personal loans, and student loans.
Is this loan calculator free to use?
Yes, the Loan Calculator on SearCalc is completely free, requires no signup, and all calculations are performed instantly in your browser.
This calculator is for informational purposes only and does not constitute financial advice. Actual loan terms, fees, and rates vary by lender. Always consult a qualified financial advisor.