Loan Calculator

A loan is a sum of money borrowed from a lender that you repay, with interest, over an agreed period. Most consumer loans are installment loans, meaning you pay a fixed amount each month until the balance reaches zero. Common types include personal loans, auto loans and student loans. While the purpose differs, the underlying repayment math is the same.

The cost of a loan is driven by three numbers: the principal (how much you borrow), the interest rate or APR (the annual cost of borrowing, expressed as a percentage), and the term (how long you take to repay). APR is the most useful figure to compare because it includes both the interest rate and certain fees, giving you a more complete picture of the true cost.

Every installment loan amortizes. At the start, a larger share of each payment goes toward interest because the outstanding balance — and therefore the interest charged on it — is highest. As you pay down the principal, the interest portion shrinks and more of each payment chips away at the balance. By the final payments, almost the entire amount goes to principal.

The term creates a crucial trade-off. A longer term lowers your monthly payment, which can make a loan feel more affordable, but it means more payments and substantially more total interest. A shorter term costs more each month but far less overall. For example, stretching a loan from three years to five years reduces the monthly burden but can increase total interest by hundreds or even thousands of dollars.

Before borrowing, it's worth checking whether the loan has any prepayment penalties, origination fees or variable-rate terms. Paying extra toward principal whenever possible shortens the term and cuts interest. Using this calculator to model several scenarios helps you borrow only what you need on terms you can comfortably manage.