Loan Calculator
The monthly payment and every month of the schedule.
The price of the house or car, or the amount you want to borrow. The down payment below is taken off.
Paid up front, so it is not financed. Leave blank for none.
The loan's interest rate. Pick below how it is quoted. Fees and insurance are not included.
US loans quote an APR: the monthly rate is the APR ÷ 12. An effective yearly rate compounds to exactly that rate in twelve months. If the contract gives a monthly rate, use it as it is.
How long the loan runs.
Fractions of a year are rounded to whole months.
Both systems are compared above; this picks which month-by-month schedule to list.
Fill in the fields and the answer appears here.
How this was worked out
Fill in the fields and the answer appears here.
Guide: Two ways to pay back the same loan3 min read
Two ways to pay back the same loan
The same money at the same rate can be repaid in two shapes. With fixed payments — an annuity, the way a US mortgage or car loan works — every payment is the same, and early ones are mostly interest. With equal principal, the same slice of the debt is repaid every month and interest is charged on what remains, so the payment starts high and falls each month.
The difference shows in the total. 240,000 at 6% APR over 30 years costs 278,011.65 in interest with fixed payments of 1,438.92, and 216,600.00 with equal principal — whose first payment, though, is 1,866.67. The page lays both out so the trade is visible rather than described.
The formulas
Fixed payment = loan × i ÷ (1 − (1 + i)−n). Equal principal: each month repays loan ÷ n, plus the balance × i in interest. In both, i is the monthly rate and n the number of months. The working shows the monthly rate used and the formula with your numbers, and the schedule lists every month — payment, interest, principal and balance — ready to save as a CSV.
APR, effective rate, and what is not included
An APR divided by twelve is the monthly rate. An effective yearly rate is what a monthly rate compounds to, and it is always higher than the APR behind it — enter the rate with the matching setting, or the payment will be off. The payment here is principal and interest only: property tax, insurance, PMI and loan fees come on top, and the APR a lender advertises may already fold some fees in.
Before you sign
Try a larger down payment: every unit of it stops accruing interest for the whole term. Compare terms — a longer loan lowers the payment and raises the total interest sharply. And see what the same money would do saved instead, in the compound interest calculator. Nothing you type leaves this tab.
Frequently asked questions
How is the monthly payment worked out?
With the annuity formula: loan × i ÷ (1 − (1 + i)^−n), where i is the monthly rate and n the number of months. 240,000 at 6% APR over 30 years is 1,438.92 a month. The working beside the answer shows the monthly rate and the formula with your numbers in it.
What is an equal-principal loan?
One where the same slice of the debt is repaid every month, and interest is paid on what is left. The first payment is the highest and each one after it is smaller. It is the standard for housing loans in Brazil (SAC) and pays noticeably less interest than fixed payments, at the price of a heavier start.
Why is so much of an early payment interest?
Because interest is charged on the balance, and at the start the balance is the whole loan. On a 30-year fixed-payment loan at 6%, the first payment is about 83% interest; the principal share only passes half around year 19. The schedule shows it month by month.
Does the payment include taxes and insurance?
No. It is principal and interest only. A mortgage payment usually also carries property tax, homeowners insurance and sometimes PMI, and many loans have fees. Add them on top to see what leaves your account each month.
APR or effective rate — which do I enter?
Whatever the offer quotes, with the setting to match. US loans quote APR, which is the monthly rate times twelve. An effective yearly rate is what that monthly rate compounds to, so it is higher than the APR behind the same payment. The same 12% under each reading gives a different payment, so the setting matters.