Formula
Monthly payment = P × r(1+r)^n ÷ ((1+r)^n − 1), where P is principal, r is the monthly interest rate and n is the number of monthly payments. If the interest rate is 0%, payment = P ÷ n.
Loan Payment Calculator
Estimate the monthly payment, total repayment and interest cost for a fixed-rate amortising loan.
Loan payment proof · 360 scheduled payments; principal and interest only.
$1,580.17Monthly payment · 6.5% APR$568,861.22Total repayment · 360 payments$318,861.22Total interest · Before fees and taxesAdd extraExtra payment · Optional principal check
Worked example
For a 250,000 loan at 6.5% over 30 years, the monthly rate is 0.065 ÷ 12 and the term is 360 payments. Substituting those values gives a scheduled payment of about 1,580.17 per month, with total scheduled repayment of about 568,861.22.
Professional note
A quoted repayment is not the full cost of borrowing. Mortgage, vehicle and business loans may include fees, insurance, taxes, redraw rules, offset accounts, compounding conventions or variable rates. Compare the annual percentage rate or locally required comparison rate when available.
Regional and unit assumptions
The calculator is currency-neutral and uses a monthly amortisation schedule. Enter the interest rate as an annual percentage, such as 6.5 for 6.5%.
Assumptions and limitations
- The loan uses a fixed annual interest rate converted to a monthly rate.
- Payments are made monthly and evenly across the term.
- Taxes, insurance, establishment fees, service fees, early-repayment penalties and variable-rate changes are not included.
- The extra monthly payment estimate assumes the lender applies the extra amount directly to principal without penalty.
Methodology & Accuracy
How this calculator is checked
CalculationTime pages are built around visible arithmetic: the formula, assumptions, worked example and practical limitations are shown so the result can be checked rather than simply trusted.
Formula used
Monthly payment = P × r(1+r)^n ÷ ((1+r)^n − 1), where P is principal, r is the monthly interest rate and n is the number of monthly payments. If the interest rate is 0%, payment = P ÷ n.
Standard or basis
The calculator is currency-neutral and uses a monthly amortisation schedule. Enter the interest rate as an annual percentage, such as 6.5 for 6.5%.
Where a calculator follows a named legal, trade or industry standard, that standard is cited visibly. Otherwise the page uses transparent general arithmetic and states its limits.Master's Tip
A quoted repayment is not the full cost of borrowing. Mortgage, vehicle and business loans may include fees, insurance, taxes, redraw rules, offset accounts, compounding conventions or variable rates. Compare the annual percentage rate or locally required comparison rate when available.
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Questions
How is a loan payment calculated?
For a fixed-rate amortising loan, the calculator converts the annual interest rate to a monthly rate, counts the number of monthly payments, then applies the standard payment formula.
Does this include taxes or insurance?
No. The result estimates principal and interest only. Property taxes, insurance, fees and other charges need to be added separately.
What happens if the interest rate is zero?
When the interest rate is zero, the calculator divides the principal by the number of monthly payments.
Can extra monthly payments reduce interest?
Yes, if the lender applies the extra amount to principal and does not charge a penalty. The calculator shows a payoff estimate for that simple case.
Calculation note
Loan payment calculators turn a lending offer into a monthly cash-flow question. They are useful because the same principal can feel very different once interest rate, repayment term and compounding are included.
Amortisation spreads a loan across scheduled payments
In an amortising loan, each payment covers interest for the period and reduces some principal. Early payments usually contain more interest; later payments usually reduce more principal because the outstanding balance is lower.
APR and comparison rates are broader than the payment formula
Consumer finance regulators often distinguish the basic interest rate from broader cost disclosures. The payment formula is useful for arithmetic, but fees and required charges can make two loans with similar monthly payments very different in total cost.
Why extra payments can matter
Extra principal payments reduce the balance sooner. When there is no prepayment penalty, that can shorten the payoff time and lower total interest, especially on long terms where interest has many months to accumulate.
Sources and further readingConsumer Financial Protection Bureau: Interest rate and APRFederal Reserve: Consumer credit and loan terms