About this tool
Loan simulator, explained
Find the monthly payment on a loan from three numbers: the amount, the interest rate and the term. The simulator also shows the total interest, the full cost with fees, a yearly schedule, and what an extra monthly payment saves.
How to use it
- 1Pick a starting point under Start from (Car loan, Personal loan or Home improvement), or set the Amount, the Interest rate (APR) and the Term yourself.
- 2Drag the Amount slider or type the exact figure, type the Interest rate (APR), and pick a Term of 3, 5, 7 or 10 years, or type any other term up to 40 years.
- 3Under Options, add an Extra payment each month or the Upfront fees the lender charges.
- 4Read the Monthly payment, the total interest, the balance chart and the Yearly schedule. Click Compare with a scenario B to set two offers side by side, then Copy results, Download CSV or Copy link.
How it works
How the monthly payment is calculated
The simulator uses the standard formula for an amortizing loan, where every monthly payment is the same and covers both interest and part of the amount borrowed. The annual rate is divided by 12 to get a monthly rate, and the term in years is multiplied by 12 to get the number of payments. At a rate of 0, the payment is simply the amount divided by the number of months.
The total interest comes from the month by month schedule: each month, the interest is the balance times the monthly rate, and the rest of the payment reduces the balance. The last payment clears whatever is left, so the principal repaid equals the amount borrowed exactly. The Yearly schedule shows the interest, principal and balance of each year, and Download CSV exports it.
An extra payment each month goes straight to the balance. The regular payment stays the same, the loan ends sooner, and the simulator shows when it is paid off and how much interest that saves. Upfront fees are added to the total cost of the loan and used to compute an APR including fees: the rate at which the monthly payments repay only the money you actually receive, the amount minus the fees.
The rate is treated as fixed for the whole term. Everything runs in your browser.
Monthly payment = P × r / (1 − (1 + r)^−n), where P is the amount, r is the annual rate ÷ 12 and n is the term in months. Total cost = P + total interest + upfront fees
When to use it
Ways people use it
Choosing a term
Set 5 years in scenario A and 3 years in scenario B on the same amount: the longer term lowers the monthly payment and raises the total interest, and the simulator shows both side by side.
Checking a lender's quote
Enter the amount, rate, term and fees from an offer, confirm the monthly payment, and compare offers on the APR including fees rather than the headline rate.
Setting a budget
Before buying a car or equipment, find the amount that keeps the monthly payment within what you can spend.
Paying off early
Add an extra monthly payment to see how many months it removes and how much interest it saves before you commit to it.
FAQ
Questions people ask
How is a monthly loan payment calculated?
With the amortization formula: payment = P × r / (1 − (1 + r)^−n), where P is the amount borrowed, r the monthly rate (annual rate divided by 12) and n the number of monthly payments. Each payment is the same, and the share going to interest falls over time.
What is the monthly payment on a $25,000 loan?
At 6.9 percent over 5 years, it comes to about $494 a month, with about $4,631 of interest in total. Over 3 years at the same rate, the payment rises to about $771 and the total interest drops to about $2,748.
What is the difference between APR and the interest rate?
The interest rate is the cost of borrowing the money itself. The APR also includes certain lender fees, expressed as a yearly rate. Enter the fees under Upfront fees to see it: $500 of fees on the $25,000 loan at 6.9 percent over 5 years gives an APR including fees of about 7.75 percent.
Does a longer loan term cost more?
Usually yes. Spreading the same amount over more months lowers each payment, but interest is charged for longer, so the total you pay goes up.
Can I pay off a loan early?
Many loans allow it, and repaying early cuts the interest on the remaining balance. On a $25,000 loan at 6.9 percent over 5 years, paying $100 more each month clears it 11 months early and saves about $924 of interest. Some lenders charge an early repayment fee, so check your loan agreement first.