🏦 Loan Calculator
Calculate monthly payments, total interest, and see a full amortization schedule for any loan.
📊 Amortization Schedule
| Month | Payment | Principal | Interest | Balance |
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📖 Understanding Loan Payments
Loan payments are calculated using the standard amortization formula. Each monthly payment is a fixed amount that covers both interest and principal. In the early years of a loan, more of your payment goes toward interest; over time, more goes toward paying down the principal balance.
The monthly payment formula is: M = P × [r(1+r)^n] / [(1+r)^n – 1], where P is the principal (loan amount), r is the monthly interest rate (annual rate / 12), and n is the total number of monthly payments.
❓ Frequently Asked Questions
A higher interest rate increases both your monthly payment and the total interest paid over the life of the loan. Even a 1% rate increase can add significantly to total interest over 30 years.
A 15-year loan has higher monthly payments but significantly lower total interest. A 30-year loan has lower monthly payments, making it more affordable month-to-month, but you pay much more interest overall.