Loan Payment Calculator

How the Loan Payment Calculator works

Use this calculator when you want a quick fixed-rate amortizing loan estimate before comparing lender disclosures, APRs, fees, taxes, insurance, escrow, underwriting, or product terms elsewhere. Use APR when fees need to be folded into a rate-style comparison, Amortization when you need a payment schedule, Personal Loan for fee and cash-received context, and Mortgage Payment when housing costs such as taxes, insurance, PMI, or escrow matter.

The app converts Annual rate to a monthly decimal rate with annualRate / 100 / 12 and converts Term in years to total months with termYears * 12. If the monthly rate is 0, Monthly payment equals loanAmount / months. Otherwise it uses PMT = P * m / (1 - (1 + m)^-n), where P is loan amount, m is monthly rate, and n is total months. Total paid equals the full-precision monthly payment times total months, and Total interest equals Total paid minus loan amount.

Loan Payment Calculator formula

This formula page covers the app's Loan Payment Calculator: a fixed-rate, level-payment amortization estimate from loan amount, annual rate, and term in years. It estimates the monthly payment, total paid, and total interest before lender fees, taxes, insurance, escrow, mortgage insurance, underwriting, prepayments, late fees, variable rates, balloon payments, or legal lending disclosures.

Step by step

1. Read the loan amount, annual rate, and term in years from the calculator inputs.
2. Convert the entered annual percentage rate into a decimal annual rate by dividing by 100.
3. Convert that annual rate into the app's monthly rate assumption by dividing by 12.
4. Convert term in years into total months by multiplying by 12. The public calculator does not expose a separate months field.
5. If the monthly rate is 0, divide loan amount by total months to get the level monthly payment.
6. Otherwise, solve the fixed amortizing payment with P times m divided by 1 minus (1 + m) raised to negative n.
7. Calculate total paid as monthly payment times total months.
8. Calculate total interest as total paid minus the original loan amount.
9. Round the displayed currency outputs to two decimals after the full-precision calculation.
10. Treat APR, finance charge, amount financed, total-of-payments disclosure, Truth in Lending, Loan Estimate, escrow, tax, insurance, and lender-specific claims as separate disclosure topics that need official source checks.

Worked example

Default example: $200,000 at 5 percent for 30 years

The default calculator inputs use a $200,000 loan amount, a 5 percent annual rate, and a 30-year term.

1. Convert 5 percent to the decimal annual rate 0.05.
2. Divide 0.05 by 12 to get a monthly rate of about 0.0041667.
3. Multiply 30 years by 12 to get 360 monthly payments.
4. Apply PMT = P * m / (1 - (1 + m)^-n) with P = $200,000, m about 0.0041667, and n = 360.
5. The calculator reports a monthly payment of $1,073.64.
6. Total paid is $1,073.64 times 360 before full-precision rounding, reported as $386,511.57.
7. Total interest is total paid minus the $200,000 loan amount, reported as $186,511.57.
8. The zero-rate fixture uses $12,000, 0 percent, and 1 year. It divides $12,000 by 12 months, reports a $1,000 monthly payment, $12,000 total paid, and $0 interest.

The payment formula shows how rate and term trade off against monthly payment and total interest. It does not prove what a lender will quote, disclose, approve, or collect.

Assumptions and what this calculator ignores

Geographic scope: works globally. The math is currency-agnostic, so enter amounts in your own currency; local taxes, fees, and product rules are not included.

• The loan amount, annual rate, and term stay fixed. The calculator models a level monthly principal-and-interest payment and does not model variable rates, promotional rates, negative amortization, interest-only periods, balloon payments, late fees, extra payments, or payment-calendar differences.
• The annual rate input is a user-entered rate assumption divided by 12 for the payment formula. It is not automatically a lender APR and does not include finance charges, origination fees, broker fees, points, closing costs, taxes, insurance, escrow, mortgage insurance, credit insurance, add-on products, lender credits, or rebates.
• Scoped independent comparator checks pass 4 of 4 scoped fixtures for overlapping monthly payment, total paid, and total interest outputs. CFPB, Regulation Z, lender, and local regulatory sources are needed before making APR, Truth in Lending, Loan Estimate, finance charge, amount financed, total-of-payments, escrow, tax, insurance, prepayment, variable-rate, approval, or legal-disclosure claims. Results are educational estimates, not financial, tax, legal, lending, credit, mortgage, consumer-rights, regulatory, or personalised advice.

What this formula does not include

• The calculator models one fixed-rate amortizing loan with level monthly payments. It does not model variable rates, teaser rates, negative amortization, interest-only periods, balloon payments, or payment changes.
• The annual rate input is divided by 12 for the payment formula. It is not automatically an APR with finance charges, lender fees, broker fees, points, closing costs, or other required disclosure items.
• The app assumes monthly compounding and monthly payback for validation scope. It does not expose the independent comparator's separate compounding-frequency or payback-frequency fields.
• Term is entered in years and converted to months by multiplying by 12. The public calculator does not have a separate month field or custom payment calendar.
• No amortization schedule, first-month principal and interest split, remaining balance table, payoff-date schedule, or extra-payment path is included on this formula page.
• No origination fees, closing costs, taxes, insurance, escrow, mortgage insurance, late fees, prepayment penalties, lender credits, rebates, credit insurance, or add-on products are included.
• No credit score, underwriting, debt-to-income review, collateral valuation, eligibility, lender quote, product approval, or contract term is modeled.
• Mortgage total monthly payments can differ from principal-and-interest payment because taxes, homeowners insurance, mortgage insurance, HOA dues, and escrow may be separate from the loan formula.
• APR, finance charge, amount financed, total of payments, Loan Estimate, Truth in Lending, and jurisdiction-specific disclosure claims need current CFPB, Regulation Z, lender, or local regulatory sources.
• Scoped independent comparator checks currently pass 4 of 4 scoped fixtures for monthly payment, total paid, and total interest under monthly compounding and monthly payback assumptions.
• The result is an educational estimate from the entered assumptions, not financial, tax, legal, lending, credit, mortgage, consumer-rights, regulatory, or personalised advice.

Common mistakes to avoid

• Comparing only the monthly payment. A longer term can reduce the payment while increasing total interest, so monthly payment and total interest should be read together.
• Treating the entered annual rate as the same thing as APR. Real APR and disclosure figures may include fees or other finance-charge rules that this three-input calculator does not model.
• Using this as a full mortgage payment, lender quote, approval, disclosure, or payoff schedule. Taxes, homeowners insurance, mortgage insurance, HOA dues, escrow, prepayment rules, and amortization schedules need separate tools or official documents.

Key terms

Principal-and-interest payment

The level monthly amount estimated by this calculator before separate fees or service costs. For mortgages, a real total monthly housing payment may also include tax, insurance, mortgage insurance, HOA dues, or escrow.

Monthly rate

The entered annual rate converted into the app's monthly rate assumption. The calculator divides the annual percentage by 100 and 12; it does not add fees or solve a legal APR disclosure.

Total interest

Total paid minus the original loan amount. It helps show the cost of carrying the fixed-rate loan over the full entered term.

Frequently asked questions

Methodology, sources, and disclaimer

This calculator is an original three-input amortization model (amount, rate, term) implementing the level-payment formula with a zero-rate branch, validated by deterministic fixtures, edge cases, and rounding policy tests. It is not copied from a single source.

Fixtures pin the default $200,000-at-5-percent-for-30-years example ($1,073.64 monthly) and the zero-rate fallback. The result remains an educational estimate, not a lender quote or an APR disclosure.

Formula version 2026.05.20. The version marks the calculation logic and validation fixture set used for this estimate.

• CFPB APR, finance charge, Truth in Lending, amount financed, total of payments, and payment-disclosure materials should be used when copy compares the calculator rate with real lender APRs or disclosures.
• CFPB Loan Estimate and principal-and-interest versus total monthly payment guidance should be used when copy discusses mortgage closing costs, taxes, homeowners insurance, mortgage insurance, escrow, or total housing payment boundaries.
• eCFR Regulation Z, lender disclosures, and relevant local regulator sources should be used when copy makes legal, jurisdiction-specific, product-specific, prepayment, variable-rate, negative-amortization, or consumer-credit disclosure claims.

Results are educational estimates, not advice. Read the full disclaimer.

Related reading

• Monthly loan payments explained
• How Calcs.finance validates calculator formulas

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