Loan Calculator
Monthly payment, total interest and amortization schedule.
Inputs
GivenResults
ComputedMonthly payment
$1,580.17
360 payments of principal and interest
$1,580.17/mo · $318,861 interest
Amortization schedule
| Month | Payment | Interest | Principal | Balance |
|---|---|---|---|---|
| 1 | $1,580.17 | $1,354.17 | $226.00 | $249,774.00 |
| 2 | $1,580.17 | $1,352.94 | $227.23 | $249,546.77 |
| 3 | $1,580.17 | $1,351.71 | $228.46 | $249,318.31 |
| 4 | $1,580.17 | $1,350.47 | $229.70 | $249,088.61 |
| 5 | $1,580.17 | $1,349.23 | $230.94 | $248,857.67 |
| 6 | $1,580.17 | $1,347.98 | $232.19 | $248,625.48 |
| 7 | $1,580.17 | $1,346.72 | $233.45 | $248,392.04 |
| 8 | $1,580.17 | $1,345.46 | $234.71 | $248,157.32 |
| 9 | $1,580.17 | $1,344.19 | $235.98 | $247,921.34 |
| 10 | $1,580.17 | $1,342.91 | $237.26 | $247,684.07 |
| 11 | $1,580.17 | $1,341.62 | $238.55 | $247,445.53 |
| 12 | $1,580.17 | $1,340.33 | $239.84 | $247,205.69 |
How this is calculated
A fully amortizing loan is repaid in equal instalments that cover the interest accrued that month plus a slice of the principal. The payment comes from the standard annuity formula:
M = P × r ÷ (1 − (1 + r)^−n)
Here P is the principal, r is the monthly interest rate (annual rate divided by twelve) and n is the total number of payments. With a zero interest rate the formula collapses to principal divided by the number of payments.
Each row of the schedule is built by applying the payment to the outstanding balance:
interest = balance × r | principal = payment − interest | balance = balance − principal
Early payments are mostly interest because the balance is high. As the balance falls, more of each payment goes to principal, which is why extra payments made in the first years of a loan save far more interest than the same amount paid later.
Worked example
A $35,000 equipment loan
- A contractor finances $35,000 of equipment at 8.5% over 5 years.
- Monthly rate r = 0.085 ÷ 12 ≈ 0.007083; n = 60 payments.
- Payment = 35,000 × r ÷ (1 − (1 + r)^−60) ≈ $718 per month.
- Total paid = 60 × 718 ≈ $43,100, so total interest ≈ $8,100.
- The amortization table shows early payments are mostly interest: in month 1, about $248 of the $718 is interest.
Common mistakes
Comparing rate instead of total cost
A lower rate over a longer term can cost more overall. Compare total interest paid, not just the headline rate or the monthly payment.
Forgetting fees in the principal
Origination fees rolled into the balance mean you pay interest on the fee itself. Add financed fees to the loan amount before calculating.
Assuming extra payments just shorten the term
They do — but only if the lender applies them to principal. Some apply prepayments to future scheduled payments unless you specify otherwise.