Loan Payment Calculator

Amount, APR, term — get the exact monthly payment, the total interest over the life of the loan, and the payoff date. Works for personal loans, family loans, auto, and more.

Free — no signup Runs in your browser Pairs with the Promissory Note
Worked example

A $20,000 loan at 7% over 5 years, amortized

Example: $20,000 · 7% APR · 5 years

The standard amortization formula spreads the loan over 60 equal payments, with each payment covering that month’s interest first and principal second:

Monthly rate = 7% ÷ 12 = 0.5833%
Payment     = $20,000 × r ÷ (1 − (1+r)−60) = $396.02
Total repaid = $396.02 × 60 = $23,761.44
Interest    = $3,761.44

Early payments are interest-heavy: the first payment includes $116.67 of interest, the last only a couple dollars. If this is a loan between family or business partners, the rate and schedule belong in a signed promissory note — and below-market family loans can have tax consequences (see the FAQ).

FAQ

Loan payment questions

With the amortization formula: payment = P × r ÷ (1 − (1+r)⁻ⁿ), where P is the amount borrowed, r the monthly rate (APR ÷ 12), and n the number of monthly payments. Each payment pays that month’s interest first; the remainder reduces principal, which is why early payments barely dent the balance.
For a simple amortized loan with no fees they’re the same number. APR becomes meaningfully higher than the note rate when there are origination fees or points, because APR spreads those costs over the term. This calculator assumes the rate you enter is the effective annual rate with no added fees.
No — this calculator amortizes fully, meaning the balance hits zero on the last payment. Interest-only loans pay just P × r monthly with the full principal due at the end, and balloon notes amortize on a long schedule but come due early. If you’re documenting one of those, the structure needs to be spelled out in the note itself.
If you lend a meaningful amount interest-free (or below-market), the IRS can treat the foregone interest as a gift under the imputed-interest rules, using the Applicable Federal Rate (AFR) as the benchmark. Charging at least the AFR and documenting the loan in a promissory note keeps a family loan clean for tax purposes.

This calculator provides general estimates for planning purposes and is not legal, tax, or financial advice. Interest rates on private loans are subject to state usury limits; tax treatment of family loans depends on IRS rules.

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