How to Use Our Loan Repayment Calculator
Provide the following details about your loan to instantly calculate your payment and see a full amortization schedule. This works for most fixed-rate loans, such as auto loans, personal loans, or private student loans.
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Loan Amount: Enter the total amount of money you are borrowing. If you’re buying a car, this would be the price after your down payment.
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Loan Term (Years): Enter the total length of time you have to pay back the loan. A longer term will result in a lower monthly payment, but you’ll pay more in interest over the life of the loan.
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Interest Rate (APR): Enter the Annual Percentage Rate (APR) for the loan. This is the primary factor that determines the total cost of borrowing.
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Extra Monthly Payment (Optional): Enter any amount you plan to pay in addition to your regular monthly payment. Use this powerful feature to see how you can pay off your loan faster and save a significant amount on interest.
Understanding Your Results
The calculator provides more than just a monthly payment. It reveals the true cost of the loan over time and shows exactly how each payment chips away at your debt.
Your Loan Repayment Summary
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Monthly Payment: This is the fixed amount you will need to pay each month to pay off the loan on schedule.
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Total Interest Paid: This is the total profit the lender will make from your loan. Minimizing this number is the key to saving money.
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Total Cost of Loan: This is the full amount you will have paid back by the end of the term, calculated as $Loan Amount + Total Interest Paid$.
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Payoff Date: The date your loan will be fully paid off. Notice how this date moves up when you add an extra monthly payment.
Your Loan Amortization Schedule
The most powerful part of the results is the amortization schedule. This is a detailed, month-by-month table that shows exactly where your money goes.
Key Insight: Look closely at the “Principal” and “Interest” columns. In the early years of your loan, a large portion of your payment goes toward interest. As time goes on and your balance decreases, more and more of your payment is applied to the principal, accelerating your progress. This is why making extra payments early on has such a dramatic impact on your total interest savings.
Frequently Asked Questions
What’s the difference between Interest Rate and APR?
While often used interchangeably, they are slightly different:
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Interest Rate: This is the base percentage used to calculate the cost of borrowing the money.
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APR (Annual Percentage Rate): This is a broader measure of the loan’s cost. It includes the interest rate plus any lender fees, such as origination fees or closing costs, expressed as an annual rate. Because it includes fees, the APR is a more accurate representation of the total cost and is the best number to use when comparing loan offers.
Is it better to take a longer loan term for a lower payment?
This is a common trade-off that depends on your financial priorities: monthly cash flow versus total cost. While a longer term makes the loan more affordable on a month-to-month basis, it will always be more expensive in the long run.
Concrete Example: Consider a $25,000 loan at a 6% interest rate.
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3-Year Term: Your monthly payment would be ~$760, and you’d pay $2,370 in total interest.
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5-Year Term: Your monthly payment drops to ~$483, but you’d pay $3,998 in total interest.
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7-Year Term: Your monthly payment is even lower at ~$366, but the total interest paid balloons to $5,712.
The 7-year loan has the most “affordable” monthly payment, but it costs you over $1,700 more than the 5-year option and more than double the 3-year option.
Should I pay off my loan early? Are there prepayment penalties?
Paying off a loan early is almost always a smart financial move, as it guarantees you save money on future interest payments. However, before you start making extra payments, you must check your loan agreement for a prepayment penalty.
This is a fee that some lenders charge if you pay off all or part of your loan ahead of schedule. While they are less common today for personal and auto loans (and are banned for federal student loans), it’s critical to confirm. If there’s no penalty, paying extra is an excellent strategy.
How can I get a lower interest rate on a loan?
Lenders base your interest rate on the risk they perceive in lending to you. To get a lower rate, you need to present yourself as a low-risk borrower. You can do this by:
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Improving Your Credit Score: This is the single most important factor. Pay all your bills on time and keep your credit card balances low.
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Lowering Your Debt-to-Income (DTI) Ratio: Pay down existing debt before applying for a new loan.
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Making a Larger Down Payment (for Auto/Mortgage Loans): This reduces the lender’s risk and the amount you need to borrow.
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Shopping Around: Get quotes from multiple lenders (banks, credit unions, online lenders) to compare offers. Getting pre-qualified often involves only a soft credit check, which won’t hurt your score.
What happens if I can only make a partial payment one month?
Making a partial payment is better than making no payment, but it will still typically result in negative consequences. Your loan is still considered delinquent for the unpaid portion. The lender will likely charge you a late fee, and the missed payment could be reported to the credit bureaus, which would lower your credit score. Always contact your lender before you miss a payment to see if they offer any hardship options or temporary forbearance.
Plan Your Next Financial Move
Now that you know your potential loan payment, see how it fits into your overall financial picture with our Debt-to-Income (DTI) Ratio Calculator. If you’re trying to decide between multiple loan offers, use our Loan Comparison Calculator to see which one is truly the best deal over time.
