Loan Calculator – Monthly Payment, Amortization, Interest & Total Cost
Calculate monthly loan payments, total interest, and full amortization schedules. Model deferred payment loans, compute bond present value, and simulate loan scenarios side by side. Free online financial calculator — no sign-up required.
Loan Details
Fees & Extra Payments (optional)
Deferred Payment Loan
Bond / Present Value Calculator
Side-by-Side Loan Comparison
Scenario A
Scenario B
Amortization Schedule
How to Use the Loan Calculator
This page combines four loan calculation tools in a single tabbed interface. Choose the tab that matches your scenario.
Amortized Loan Calculator
Enter your loan amount, annual interest rate, term, and payment frequency. Optionally add an origination fee and an extra payment per period. Click Calculate Loan Payment to see your periodic payment, total interest, total repayment, payoff date, and full amortization schedule. Use the extra payment field to model early payoff and see exactly how much interest you save.
Deferred Payment Loan Calculator
Enter the loan amount, rate, deferment period, repayment term, and compounding frequency. The calculator shows how much your balance grows during deferment, your monthly payment once repayment begins, and the total cost compared to a standard amortized loan of the same amount.
Bond Calculator
Choose whether to find the present value (what a future amount is worth today) or the maturity value (what a current amount grows to). Enter the known amount, rate, term, and compounding frequency. The calculator applies the standard compound interest formula and shows the implied growth or discount.
Loan Simulator
Enter two independent loan scenarios side by side — different amounts, rates, terms, or extra payments — and compare payments, total interest, and total cost instantly. Use this to evaluate whether a lower rate is worth a shorter term, or how much extra payments actually save.
What Is an Amortized Loan?
An amortized loan is any loan repaid through a series of equal periodic payments, where each payment covers the interest accrued since the last payment and reduces the outstanding principal. The payment stays constant throughout the term, but its internal composition changes: early payments are mostly interest, late payments are mostly principal.
How Fixed Payments Work
At the start of each period, interest is calculated on the current balance: interest = balance × periodic rate. The rest of the fixed payment reduces principal: principal = payment − interest. Because the balance falls each period, the interest portion shrinks, allowing more of the same fixed payment to reduce principal. This self-correcting structure is why the loan pays off exactly at term end.
The Amortization Formula
The standard formula for a periodic loan payment is:
M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]
Where M is the periodic payment, P is the principal, r is the periodic rate (annual rate ÷ payments per year ÷ 100), and n is the total number of payments. If the rate is zero, the payment is simply P ÷ n.
Common Amortized Loans
- Personal loans: Typically 1–7 years, unsecured, rates 6–36% depending on credit.
- Auto loans: Typically 36–84 months, secured by the vehicle, rates 4–15%.
- Mortgages: Typically 15 or 30 years, secured by the property, rates 5–8%.
- Student loans: Often 10–25 years after a deferment period during school.
- Business loans: 1–10 years, rates vary widely by lender type and creditworthiness.
What Is a Deferred Payment Loan?
A deferred payment loan is a loan where no payments are required during an initial period — the deferment period. The lender charges interest throughout, but instead of being paid, that interest is added to the outstanding principal balance. This is called interest capitalization. When the deferment period ends, you begin repaying a balance larger than the original loan amount.
How Deferment Works
Each compounding period during deferment, interest accrues on the current balance: new balance = balance × (1 + r/n). After t years of deferment with n compounding periods per year, the balance is:
Balance at Repayment = P × (1 + r/n)^(n × t)
This larger balance then becomes the principal for a standard amortized repayment schedule.
Deferred Payment — Worked Example
$10,000 Student Loan — 2-Year Deferment, 5-Year Repayment at 6%
How the Bond Calculator Works
In this calculator, "bond calculation" refers to computing the relationship between a present value (what you pay or invest today) and a maturity value (what you receive or owe at a future date) using compound interest. This applies to savings bonds, zero-coupon bonds, certificates of deposit, and any lump-sum future obligation.
Present Value vs. Maturity Value
Present value (PV) is what a future lump sum is worth in today's money, discounted at a given rate. Maturity value (FV) is what a current lump sum grows to at a given rate over time. The two are related by:
FV = PV × (1 + r/n)^(n×t) | PV = FV ÷ (1 + r/n)^(n×t)
For continuous compounding: FV = PV × e^(r×t), where e is Euler's number (~2.71828).
Bond Calculator — Worked Example
What is the present value of $10,000 due in 5 years at 5% compounded monthly?
How the Loan Calculator Works
Principal and Interest
The principal is the amount borrowed. Interest is the lender's charge for providing that money, calculated as a percentage of the outstanding balance each period. Early in an amortized loan, the balance is highest, so interest takes up most of each payment. As principal shrinks, interest shrinks with it.
APR vs. Nominal Interest Rate
The nominal rate is used to calculate each payment. APR (annual percentage rate) includes the nominal rate plus any lender fees spread over the loan term. Two loans with the same nominal rate can have different APRs if their fees differ. For comparing true loan cost, always use APR. For calculating payment amounts, lenders typically use the nominal rate.
Payment Frequency
More frequent payments reduce the outstanding balance faster, which means less interest accrues between payments. Switching from monthly to biweekly payments (26 payments per year vs. 12) effectively adds one extra monthly payment each year. On a $15,000 5-year loan at 7%, that saves approximately $180 in interest and shortens the loan by about 5 months.
Extra Payments and Early Payoff
Any amount paid above the scheduled payment is applied entirely to principal. A smaller principal means the next period's interest charge is lower, so even more of the next regular payment reduces principal. This snowball effect means extra payments in early years save significantly more interest than the same extra payments in later years, because the benefit compounds over the remaining term.
Worked Examples
Example 1 — Standard Personal Loan
Example 2 — Loan with Origination Fee Financed
Example 3 — Extra Payment Savings
Example 4 — Deferred Payment Loan
Example 5 — Bond Present Value
Loan Comparison: Term, Rate, and Extra Payments
The table below compares a $15,000 loan at 7% across different terms, showing the trade-off between monthly payment size and total interest cost.
| Scenario | Monthly Payment | Total Interest | Total Repayment | Payoff |
|---|---|---|---|---|
| 3-year at 7% | $463.16 | $1,674 | $16,674 | 36 months |
| 5-year at 7% | $297.02 | $2,821 | $17,821 | 60 months |
| 7-year at 7% | $227.63 | $4,120 | $19,120 | 84 months |
| 5-year at 5% | $283.07 | $1,984 | $16,984 | 60 months |
| 5-year at 10% | $318.71 | $4,123 | $19,123 | 60 months |
| 5-year at 7% + $100/mo extra | $397.02 | $1,809 | $16,809 | ~49 months |
Key insight: Choosing a 3-year term instead of 5-year saves $1,147 in interest but raises the monthly payment by $166. Adding $100 extra per month to a 5-year loan saves $1,012 in interest and finishes 11 months early, with more payment flexibility than committing to a shorter term from the start.
Common Loan Calculation Mistakes to Avoid
- Focusing only on monthly payment: A longer term always produces a lower payment, but it also produces dramatically higher total interest. Always compare total repayment cost, not just the monthly number.
- Ignoring origination fees: A $500 fee financed into a 5-year loan at 7% costs roughly $560 total. An apparently lower-rate loan with high fees may cost more than a higher-rate loan with no fees.
- Confusing APR with nominal rate: When comparing loans, use APR. When calculating payment amounts, lenders use the nominal rate. These differ whenever fees are present.
- Underestimating deferred-payment cost: A loan that "defers" payments for 18 months does not pause the cost — interest accrues and capitalizes. The total cost of a deferred loan is always higher than a loan that starts repayment immediately.
- Choosing a longer term to manage cash flow without comparing total cost: A 7-year auto loan at 7% vs. a 5-year loan on $15,000 costs $2,299 more in interest. That difference funds more than 10 extra monthly payments on the shorter loan.
- Not modeling extra payments: Even $50/month extra on a mid-size loan typically saves hundreds in interest and shaves months off the term. The amortization schedule in this calculator shows exactly how much.
Frequently Asked Questions
Related Calculators
Disclaimer: All results are estimates based on standard amortization and compound interest formulas. Actual loan costs depend on lender-specific compounding rules, fee structures, and repayment terms outlined in your loan agreement. Deferred loan balances may vary based on whether interest is subsidized. Always verify final terms and costs with your lender before signing any loan agreement.
