In a typical financial loan, you (the borrower) borrow an amount from a lender, then pay the loan back by making regular, consistent payments of a fixed amount. (This calculator assumes that you will be making monthly payments.) The lender charges interest, which is usually expressed in annual terms, such as 4.2% per year.

Your fixed monthly payment is calculated so that it pays back the original loan amount, plus interest that was accrued during the payment process. Use this loan calculator to see the effect that varying interest rates have on the total amount that you pay in the process of paying back the loan. Test various annual interest rates, then look in the Loan Summary table to see how much Total Interest you pay in paying off the loan.

Loans can frequently be set on various repayment schedules -- 12 months, 24 months... even up to 360 months (30 years) for a home mortgage. Use this calculator to see the effect of the length of the loan -- the number of payments -- on the total amount that you pay over the life of the loan. Test various loan lengths (various numbers of payments), then look in the Loan Summary table to see how much -- in total -- you pay in paying off the loan. For a home mortgage, for instance, test 15-year (180 monthly payments), 20-year (240 payments), 25-year (300 payments), and 30-year (360 payments) loans.

In testing various scenarios, study the trade-off between the amount of each monthly payment, and the total dollars that you pay over the life of the loan. For monthly cash flow purposes, you must be able to make the monthly payments, so you don't want them to be more than you can afford. Over the long term, however, you want to minimize the total amount of dollars that you pay.

Enter the original amount borrowed in the textfield. You do not need to enter a dollar sign, just the numeric amount of the loan.

Please enter the amount of the loan. 0 is not a valid loan amount.

Enter the annual interest rate for this loan, such as 4.2 for 4.2%. Be sure to enter the annual interest rate, in the format that is shown. You don't need to enter the percent sign.

As the interest rate goes up, the total amount of interest that you will pay over the life of the loan increases as well.

Enter the number of monthly payments for the life of the loan. For long loans that are expressed in years, multiply the number of years by 12 to get the number of monthly payments to be made.

As the life of the loan increases (that is, as the number of payments increases), the amount of each payment will decrease, but the amount of interest that you will pay over the life of the loan increases. For monthly cash flow purposes, you must be able to make the monthly payments, so you don't want them to be more than you can afford. Over the long term, however, you want to minimize the total amount of dollars that you pay. If you can afford a higher monthly payment, a shorter loan length (fewer payments) will save your long-term dollars paid. But you have to be able to afford the monthly payments.

Please enter the number of payments for the loan. 0 is not a valid number of payments.

This table shows a summary of the important financial characteristics of this loan, including a re-cap of the three inputs: loan amount, annual interest rate, and number of payments.

The table shows the calculated monthly payment required to pay off the loan (with interest), plus the total interest paid and the total dollars paid. Study these values as you perform "what-if analysis" by varying the interest rates and number of payments in your inputs.

This is a Loan Amortization Schedule. It shows each payment made over the life of paying off the loan, with one row per payment. Each payment pays the current interest owed, with the remainder of the payment going toward principal reduction (paying down the loan balance).

The final loan payment may be slightly different from the calculated monthly payment. The final payment will be whatever amount is required to pay off the loan, down to the cent.