Payment Calculator

Assumptions & Limitations

This calculator is designed for loans repaid in a fixed number of equal monthly payments, such as most personal loans, auto loans, and mortgages. It is not appropriate for weekly or bi-weekly repayment schedules or loans with a large lump-sum payment at the end.

It assumes interest is compounded monthly and the interest rate remains fixed for the full loan term. Results will be inaccurate for loans that compound on another schedule or use a variable interest rate, such as many payday loans and credit cards.

Calculator Inputs

A loan is made up of three key ingredients. All three are required to calculate the monthly payment; the origination fee is optional.

• Loan Amount: Also known as principal, this is the amount you agree to borrow from the lender. Learn about personal loans
• Interest Rate: The annual percentage of the loan amount paid as interest. A higher rate increases both the monthly payment and the total cost of the loan. Interest rate differs from APR, which also incorporates fees. Interest rate and APR
• Repayment Period: Also known as the loan term, this is the total time over which you repay the loan. It can be entered in years or months.
• Origination Fee: An optional administration charge imposed by some lenders. It is typically deducted from the loan proceeds and may be entered as a percentage or a fixed dollar amount. Learn about origination fees

Payment Summary

After the required fields are completed, the calculator summarizes the payments associated with the loan.

• Monthly Payment: The fixed monthly principal-and-interest payment determined at the outset of the loan.
• Total Interest: The total interest paid over the life of the loan.
• Total Fees: The origination fees paid. The calculator does not include other charges such as late-payment or application fees.
• Total Interest + Fees: The combined interest and origination fees paid over the life of the loan.
• Total Amount Paid: The loan amount plus total interest and fees.

Amortization Schedule

The amortization schedule shows how each payment is divided between principal and interest throughout the loan term. Origination fees do not affect the schedule because they are treated as upfront costs.

• Payment: The fixed monthly payment determined at the outset of the loan.
• Principal: The portion of each payment that reduces the loan balance.
• Interest: The portion of each payment that pays the cost of borrowing.
• Balance: The amount still owed after that month’s principal payment.

As payments are made, the amount allocated to interest generally decreases while the portion going to principal increases. This process is known as amortization.