Payment Calculator

Most consumer loans, including mortgages, car loans and personal loans, are repaid in equal monthly installments. Two of the three key numbers usually fix the third: if you know the amount and the term, the payment follows; if you know the amount and what you can afford each month, the term follows. Use the Fixed Term tab for the first case and the Fixed Payments tab for the second.

Fixed Term

Choose Fixed Term when the length of the loan is already decided, as with a 15- or 30-year mortgage or a 60-month car loan. The calculator then finds the level payment that brings the balance to exactly zero after the last installment. With the defaults, $200,000 at 6% over 15 years costs $1,687.71 a month, or $303,788.46 in total, of which $103,788.46 is interest.

Term length is the biggest lever on total cost. Stretching the same loan to 30 years lowers the payment to $1,199.10, but total interest more than doubles to about $231,676. Shorter terms often come with lower rates as well, which widens the gap. Before you sign:

• Pick the shortest term whose payment fits comfortably in your budget, leaving room for savings and emergencies.
• Check whether the lender allows early repayment without a fee, so you can shorten a longer loan later.

PMT = P × r ÷ [1 − (1 + r)⁻ⁿ] n = −ln(1 − P·r ÷ PMT) ÷ ln(1 + r)

PMT

monthly payment

P

loan amount

r

monthly interest rate (annual rate ÷ 12)

n

number of monthly payments

The second formula solves for the number of payments when the payment is fixed. It only has an answer when the payment is larger than one month's interest, P × r.

Fixed Monthly Payment Amount

Choose Fixed Payments when you know what you can pay each month and want to know how long the debt will last. This is common for paying down a balance on your own schedule or for deciding how much extra to put toward a loan. Paying $2,000 a month on $200,000 at 6% clears it in 11 years and 7 months with $77,951.56 of interest, three years and five months sooner than the 15-year schedule and almost $26,000 cheaper.

The payment must be larger than the first month's interest. At 6%, $200,000 accrues $1,000 of interest a month, so a $1,000 payment would never reduce the balance. The closer the payment is to that interest figure, the more slowly the debt falls and the more sensitive the payoff date becomes to small changes, which is why small increases in a payment can shorten a loan by years.

Interest Rate (APR)

Enter the loan's interest rate as an annual percentage. The calculator divides it by 12 and applies it to the outstanding balance each month, which is how most installment loans in the United States accrue interest.

Lenders must also disclose the annual percentage rate, or APR, under the Truth in Lending Act. APR adds required finance charges such as origination fees and mortgage points to the interest, expressed as a yearly rate, so it is usually a little higher than the note rate. It is the better figure for comparing two offers, but the payment itself is calculated from the note rate. If a fee is added to the loan balance rather than paid upfront, increase the loan amount here to include it. The APR calculator converts between the two.

Rates depend on your credit score, income and existing debt, the size of your down payment, the term and whether the loan is secured, so it is worth comparing quotes from several lenders.

Variable vs. Fixed

A fixed-rate loan keeps the same rate for its whole life, so the payment never changes and the schedule above is exact. A variable or adjustable-rate loan ties the rate to a benchmark and resets it periodically, so payments can rise or fall. Variable loans often start lower, which suits borrowers who expect to repay early or who can absorb higher payments; fixed loans suit those who value certainty.

Variable Rate Information

A variable rate is built from two parts: an index that moves with the market and a margin that the lender adds and keeps constant. Common indexes include the prime rate, which banks set for their best customers and which closely follows the Federal Reserve's federal funds target, and the Secured Overnight Financing Rate (SOFR), which replaced LIBOR for most new U.S. loans after 2023.

Adjustable-rate mortgages usually have an introductory fixed period, such as five or seven years, followed by regular adjustments. Caps limit how far the rate can rise at the first adjustment, at each later adjustment and over the life of the loan. Credit cards and home equity lines of credit typically track the prime rate and change shortly after the Federal Reserve moves.

This calculator assumes one constant rate. To test a variable loan, run it at today's rate and again at a higher rate, for example the lifetime cap, to see the range of payments you might face.

Frequently asked questions

Sources

• CFPB – What is the difference between a loan interest rate and the APR?
• Board of Governors of the Federal Reserve System