Loan Calculator
Monthly payment, total interest and amortization schedule for personal, auto, or consumer loans.
Every fixed-rate loan — car, personal, consumer — follows the same formula. A lender gives you an amount today, and you pay it back in equal monthly installments that cover interest plus chipping away at principal. The APR you sign and the term you pick together determine the monthly payment and the total cost.
This calculator shows both: the payment you'll owe every month, and the total interest you'll hand to the lender over the life of the loan. Use it to compare offers, sanity-check a lender's quote, and see how much shortening the term actually saves.
How the payment is calculated
The formula used is the standard French amortization: PMT = P × r / (1 − (1 + r)^−n), where P is the principal, r is the monthly rate, and n is the number of payments. Each monthly payment is constant, but the split between interest and principal shifts: early on, most goes to interest; by the end, most goes to principal.
We treat APR as nominal and divide by 12 to get the monthly rate — the convention used by US consumer lenders, bankrate.com, and most online calculators. If a lender quotes an effective annual rate (EAR) or a compounded rate, convert to nominal first: nominal = 12 × ((1 + EAR)^(1/12) − 1).
The amortization schedule shows, for any month, how much of your payment went to interest and how much to principal. First month's interest = balance × monthly rate. Everything else in the payment reduces the balance.
PMT = P × r / (1 − (1 + r)^−n) · r = APR / 12
- P
- Principal (amount borrowed)
- r
- Monthly rate (APR divided by 12)
- n
- Number of monthly payments
Practical examples
Car loan
Setup: $25,000 at 7.5% APR over 60 months.
r = 0.075/12 ≈ 0.00625. PMT ≈ $501. Total paid: $30,056. Interest: $5,056 (20% of principal).
Takeaway: Over five years you pay a fifth of the car's price in pure interest. Shortening to 48 months drops total interest by about $1,000 and raises the payment by ~$77/mo — worth it if your budget can absorb it.
Personal loan for consolidation
Setup: $10,000 at 12% APR over 36 months.
r = 0.01. PMT ≈ $332. Total paid: $11,957. Interest: $1,957.
Takeaway: Cheaper than credit-card debt (typically 18-25% APR). Only makes sense if you stop adding to the cards — otherwise you end up with both the new loan and a growing balance again.
Short vs long on the same loan
Setup: $15,000 at 9% APR: 24 months vs 60 months.
24 months: PMT $685, total interest $1,448. 60 months: PMT $311, total interest $3,683.
Takeaway: Cutting the term in half (60 → 24 months) more than doubles the payment but saves over $2,200 in interest. Rate is fixed; term is the lever you control after choosing the loan.
Practical tips
- Shop rate, not payment. Lenders sometimes tease low monthly payments by stretching the term. A 72-month car loan with $350/mo payments can cost $3,000 more than a 48-month loan with $500/mo payments on the same car. Compare APR + total paid, not just the monthly number.
- Check for prepayment penalties. Many US auto loans have no penalty; some personal loans charge a fee for paying off early. If you plan to pay early, this detail swings the choice.
- Don't finance the dealer markup. Financing fees, dealer add-ons, and GAP insurance often get folded into the principal. Every dollar financed earns the lender interest for years. Pay cash for extras or negotiate them off.
- Your credit score moves APR 5-15 points. For a $30,000 car loan, a 700 vs 750 FICO can swing monthly payment $40-80 and total interest $2,500-4,800. Check your score before applying.
When this calculator is not enough
Doesn't handle variable-rate loans (ARMs, credit lines with floating rates). The schedule assumes the rate you enter stays fixed.
Doesn't model fees: origination fees, underwriting fees, IOF (Brazil), insurance. Those reduce the amount you actually receive OR add to the balance. Ask the lender for the APR including fees.
Doesn't handle balloon payments (large final payment) or interest-only periods. Those are non-standard structures that require a different formula.
For home mortgages, use the dedicated Mortgage calculator — it adds the SAC amortization option used in Brazil.
Frequently asked questions
What's the difference between interest rate and APR?▾
The interest rate is what you pay on the principal. APR (Annual Percentage Rate) includes the interest rate plus certain fees expressed as a yearly rate. APR is always ≥ the interest rate. Comparing APRs across lenders is the fairest way to shop — that is precisely why regulation requires the disclosure.
Should I take the longest term I can afford?▾
No. Longer term = lower payment but dramatically more interest. Pick the shortest term you can comfortably afford — with enough buffer that an unexpected expense won't force you into late payments (which hit your credit score hard).
Can I use this for Brazilian financiamento de carro?▾
Yes, but use the CET (Custo Efetivo Total) that the bank is required to disclose, not just the taxa nominal. CET includes IOF, TAC, and seguro prestamista — the actual all-in cost. Comparar CET é lei.
What if I pay extra every month?▾
Extra principal goes directly to reducing the balance, which reduces future interest. A $100 extra/month on a $20,000 auto loan at 8% over 60 months can shave ~9 months off the term and save ~$800 in interest. This calculator doesn't model extras yet — for now, run the calculation with a shorter term to see the equivalent saving.
Why does the first payment have so much interest?▾
Each month you pay interest on the outstanding balance. When the balance is big (start of the loan), interest is big. As principal gets paid down, the interest portion shrinks and more goes to principal. The monthly payment stays constant.
Sources
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