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Enter how much you borrow, the annual interest rate and the term in months. You get the fixed monthly payment, the total interest you pay over the life of the loan and a year-by-year amortization schedule.

The amount you finance. For a car, the price minus your down payment and trade-in, plus any taxes and fees you finance.

The fixed annual rate from your loan offer.

In months: 60 months is 5 years.

Use a period for decimals, like 12.5. Commas for thousands are fine. The result updates as you type.Decimals with a period, like 12.5

Your entries stay on your device. The math runs right in your browser.

Result: Monthly payment

$391.32

Borrowing $20,000.00 at 6.5% over 60 months costs $391.32 a month. You pay $3,479.38 in interest, $23,479.38 in total.

  • Total interest: $3,479.38
  • Total of all payments: $23,479.38
  • Effective annual rate (monthly compounding): 6.70%

Amortization schedule by year
YearPaymentsInterestPrincipalBalance
1$4,695.88$1,196.98$3,498.89$16,501.11
2$4,695.88$962.65$3,733.22$12,767.89
3$4,695.88$712.63$3,983.24$8,784.64
4$4,695.88$445.87$4,250.01$4,534.64
5$4,695.88$161.24$4,534.64$0.00

Step by step

$20,000.00 + $3,479.38 = $23,479.38

  1. Monthly rate r: the annual rate of 6.5% divided by 12, as a decimal.
  2. Payment from the annuity formula: 20,000 × r / (1 - (1 + r) to the power of -60) = $391.32. At 0% the formula does not apply: the payment is simply 20,000 / 60.
  3. Over 60 months: the amount borrowed plus $3,479.38 of interest, $23,479.38 in total.
  4. Effective annual rate without fees: (1 + r) to the power of 12, minus 1 = 6.70%.

Formula

M = P × r / (1 - (1 + r)-n)
r = APR / 12 / 100
effective annual rate = (1 + r)12 - 1
M
monthly payment
P
loan amount (principal)
r
monthly interest rate as a decimal, 0.00625 for 7.5% a year
n
number of monthly payments

How it works

Most personal loans and auto loans in the US are fully amortizing: you pay the same amount every month, and each payment covers that month’s interest plus a piece of the principal. The monthly rate is the annual rate divided by 12. At 7.5% APR, that is 0.625% a month. The payment that pays off the loan exactly by the last month follows from the annuity formula below.

Early in the loan most of each payment goes to interest, because interest is charged on a large balance. As the balance shrinks, more of each payment goes to principal. The schedule under the calculator shows this year by year: how much you paid, how much of it was interest, how much reduced the principal and what you still owe at the end of each year. A $25,000 car loan at 7.5% for 60 months costs $500.95 a month and $5,056.92 in interest in total.

For a car loan, enter the amount you actually finance: the price minus your down payment and trade-in value, plus sales tax and fees if you roll them into the loan. A longer term lowers the payment but raises the total interest: the same $25,000 over 72 months is $432.25 a month but $6,122.20 in interest. This calculator assumes a fixed rate, no fees and no prepayment. To see how savings grow instead, use the compound interest calculator.

The formula

With a rate of 0%, the formula reduces to the amount divided by the number of months. Total interest is all payments minus the amount borrowed: M × n - P.

For a loan without fees, the APR on your loan disclosure is the nominal annual rate, the monthly rate times 12. The effective annual rate shows what that rate means when interest compounds monthly; at 7.5% APR it is 7.76%. Fees such as origination fees raise the APR above the note rate and are not included here.

Example

What is the monthly payment on a $25,000.00 car loan at 7.5% for 60 months?

  1. Monthly rate: 7.5 / 12 / 100 = 0.00625.
  2. Payment: 25,000 × 0.00625 / (1 - 1.00625^-60) = $500.95.
  3. Over 60 months you pay $30,056.92, of which $5,056.92 is interest.

Borrowing $25,000.00 at 7.5% over 60 months costs $500.95 a month. You pay $5,056.92 in interest, $30,056.92 in total.

Load this example into the calculator

Frequently asked questions

How is a monthly loan payment calculated?

Divide the annual rate by 12 to get the monthly rate r, then use M = P × r / (1 - (1 + r)^-n), with P the amount and n the number of months. For $10,000 at 6% over 36 months, r = 0.005 and the payment is $304.22.

How much is a $30,000 car loan payment?

It depends on the rate and term. At 7% for 60 months it is $594.04 a month; at 7% for 72 months, $511.47. At 5% for 60 months it drops to $566.14. Enter your own numbers above to see the exact payment and interest.

Is a longer loan term better?

A longer term lowers the monthly payment, but you pay interest for more months, so the total cost goes up. Longer car loans also make it more likely you owe more than the car is worth for a while. Compare the total interest of two terms before you choose.

What is the difference between APR and interest rate?

The interest rate is what the lender charges on the balance. The APR, required on US loan disclosures under the Truth in Lending Act, also folds in certain fees, so it is the better number for comparing offers. If a loan has no fees, the two are the same.

Does paying extra each month save interest?

Yes. Extra payments go to principal, so later interest is charged on a smaller balance and the loan ends sooner. Check that your loan has no prepayment penalty and ask the lender to apply the extra amount to principal. This calculator shows the regular schedule without extra payments.

Last updated: Responsible editor: Jared Alan
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