How to estimate monthly loan payments

Check the loan type before calculating

This calculator estimates equal monthly payments for a fully amortizing, fixed-rate loan. Each payment covers interest and part of the principal so the balance reaches zero after the entered number of months. It assumes a nominal annual rate divided by 12.

It does not model flat-rate loans, variable interest, balloon payments, extra repayments or an interest-only period. Fees, insurance and taxes are excluded. If a lender’s quote uses one of those structures, the estimate may not match the actual payment schedule.

Worked example: 10,000 over 36 months

Enter a loan amount of 10,000, an annual interest rate of 6% and a term of 36 months. The monthly rate is 0.06 ÷ 12 = 0.005. The formula is payment = P × r ÷ (1 − (1 + r)⁻ⁿ), where P is principal, r is the monthly rate and n is the number of payments.

The estimated monthly payment is 304.22. Using unrounded values, the total repayment is 10,951.90 and total interest is 951.90. Multiplying the displayed rounded payment by 36 gives a slightly different total; the calculator uses unrounded amounts internally. A lender may round each installment differently.

Enter your own loan

1. Confirm that your lender quotes a fixed nominal annual interest rate for an amortizing loan. Do not substitute an APR without checking its definition.
2. Enter the amount borrowed in one currency, the annual interest percentage and the term in whole months.
3. Choose Calculate and review Monthly payment, Total repayment and Total interest together.
4. Compare a second term using the same amount and rate. A smaller monthly payment can still mean more total interest.
5. Compare the estimate with the lender’s written schedule, including fees and charges that are outside this tool.

Avoid common input mistakes

Enter 6 for 6%, not 0.06. Enter 36 months for three years, not 3. At zero interest, the payment is principal divided by months; 12,000 over 24 months gives 500 per month before any excluded charges.

APR and interest rate describe different things: APR incorporates certain additional loan costs. The guide linked below explains the distinction. This tool does not decide whether a loan is affordable or suitable; use it to understand the arithmetic and check the actual contract separately.