Loan Calculator
Calculate monthly loan payments, total interest, amortization schedule. Mortgage, car loan, personal loan calculator. Free EMI calculator online
A loan calculator that just gives you "$1,234 per month" is hiding the only number that matters: how much of each payment is principal versus interest. For a 30-year mortgage, your first payment is mostly interest — almost none of it reduces what you owe. This calculator shows the full amortization schedule, lets you simulate extra payments, and computes the total interest you will pay over the life of the loan. It uses the standard equal-payment (fixed-installment) formula that banks use.
How the monthly payment is computed
For a fixed-rate, fully-amortizing loan: M = P × r × (1+r)^n / ((1+r)^n − 1), where M is monthly payment, P is principal, r is monthly interest rate (annual / 12), and n is total months. The formula assumes equal payments and that interest accrues monthly on the remaining balance. Variations: some loans (mostly European mortgages) compound annually; revolving credit (credit cards) recomputes minimum payments differently each month.
The APR (Annual Percentage Rate) is the headline number lenders quote. The mathematically-correct comparison number is APY (Annual Percentage Yield), which accounts for compounding. For monthly-compounded loans, APY ≈ (1 + APR/12)^12 − 1. A 6% APR is about 6.17% APY.
Working example: a 30-year mortgage
Input
Principal: $300,000 Annual rate: 6.5% Term: 30 years (360 months)
Output
Monthly payment: $1,896.20 First payment: Principal portion: $271.20 Interest portion: $1,625.00 Remaining balance: $299,728.80 Month 180 (halfway): Principal portion: $626.46 Interest portion: $1,269.74 Remaining balance: $234,114.39 (you still owe 78% of the original loan!) Final payment: Principal portion: $1,886.00 Interest portion: $10.20 Remaining balance: $0.00 Total paid over 30 years: $682,633.10 Total interest: $382,633.10 (more than the principal)
The "you still owe 78% halfway through" is the killer fact about long fixed-rate loans. Early extra payments have massive leverage on total interest because they front-load principal reduction — adding $200/month to this loan saves ~$87,000 in interest and shortens the loan by ~6 years.
Variants the basic formula does not cover
- Adjustable-rate mortgage (ARM) — rate changes after an initial fixed period (5/1 ARM = 5 years fixed, then resets yearly). Payments after reset depend on the index + margin, capped by per-adjustment and lifetime caps. Cannot be calculated as a fixed loan.
- Interest-only — first N years are interest payments only; principal does not amortize until year N+1, when the payment jumps. Higher total interest, lower early payments.
- Balloon — small payments for the term, large lump sum at the end. The lump sum (balloon) is usually 70-80% of the principal. Refinancing risk if rates rise before the balloon date.
- Negative amortization — payments are less than the interest; balance grows over time. Banned for most consumer loans in the US after 2008; still exists in commercial lending.
- Bi-weekly payments — pay half the monthly amount every two weeks. That is 26 half-payments per year = 13 monthly payments, an extra payment per year. Shortens 30-year mortgage to ~25 years and saves significant interest.
When to reach for this tool
- You are shopping for a mortgage and comparing offers — the lowest "monthly payment" is not the cheapest loan; check total interest.
- You are deciding whether to make extra principal payments on an existing loan and want to see exactly how much interest you save.
- You are debating "should I take a 15-year or 30-year mortgage" — the 30-year has lower monthly but pays roughly 2× the interest.
- You are budgeting for a car loan or student loan and want the actual cost over the life of the loan, not just the monthly bite.
What this tool will not do
- It will not include fees. Mortgage origination fees, "points", closing costs, PMI premiums, and property taxes all add to the true cost but are loan-specific. The calculator shows the financing cost only.
- It will not account for tax effects. US mortgage interest is partly deductible above the standard deduction threshold; effective after-tax cost is lower for high earners. Country-specific.
- It will not assess whether you can afford the loan. Debt-to-income ratios, emergency fund, job stability — those are out of scope. The math says what you owe; whether you can pay is a separate question.
Frequently asked questions
Why is most of my early mortgage payment interest?
Because interest is computed on the outstanding balance, and your outstanding balance is highest at the start. Month 1 of a $300k loan at 6.5% owes the bank one month's interest on $300k ≈ $1625. Your payment is $1896, so $271 goes to principal. As principal drops, interest drops, more of each payment goes to principal — but slowly.
Should I pay off my mortgage early?
Pure financial math: only if your mortgage rate is higher than the after-tax return you could get elsewhere. At a 6.5% rate, paying down the mortgage is a guaranteed 6.5% return — hard to beat reliably. At a 3% rate, the market historically beats that. Behavioral factors (sleep-at-night, retirement age) often outweigh the math.
What is the difference between APR and interest rate?
The interest rate is the cost of borrowing money expressed as a percentage. APR includes the rate plus mandatory loan fees expressed as an effective annual rate. Two loans with the same rate but different fees have different APRs. APR is what you compare; rate alone is misleading.
How much does an extra $100/month save?
A lot, on a long loan. On a 30-year, $300k, 6.5% mortgage, an extra $100/month saves about $44,000 in interest and shortens the loan by ~3 years. The exact savings scale with rate and loan length — early payments on long, high-rate loans have the most leverage.
Can I trust online loan calculators?
For amortization math, yes — the formula is the same everywhere and the math is deterministic. Differences in output come from rounding (cents per month accumulate), assumed compounding frequency (monthly vs daily), and whether fees are included. Compare line items, not just the headline number.
What is a "principal payment" vs "extra payment"?
A regular monthly payment is split (the schedule decides how). An "extra payment" or "principal-only payment" is over and above the scheduled amount, applied entirely to the balance, not to interest. Always confirm with your servicer how to designate it — some auto-apply extras to the next due payment instead of principal, defeating the purpose.
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Last updated · E-Utils editorial team