Loan calculator
Work out the monthly payment, total interest and payoff date for a personal loan, car loan or any fixed-rate loan.
Loan details
Enter the amount, rate and term from your loan offer.
60 monthly payments.
Paid on top of the required payment, applied straight to principal.
Common on personal loans. Leave at 0 if none.
Warren provides educational information, not individualized financial, tax or legal advice. Read our disclaimers.
How loan interest works
- Amortization front-loads interest
- Interest is charged on the remaining balance, so early payments are mostly interest and barely dent the principal. As the balance falls, more of each payment goes to principal. That is why paying extra early in the loan saves the most.
- APR versus interest rate
- The rate sets the monthly interest. The APR adds upfront fees, like an origination fee, to show the full yearly cost. Two loans with the same rate can have very different APRs, so compare APRs when shopping.
- The effect of term length
- Stretching a loan from 3 to 6 years can nearly halve the monthly payment, but you pay interest for twice as long and the total cost rises sharply. Shorter terms cost more per month and less overall.
- Prepayment penalties
- Some lenders charge a fee if you pay the loan off early, usually a percentage of the remaining balance. Read the loan agreement before planning extra payments; a penalty can wipe out the interest you would save.
Frequently asked questions
- How is the monthly payment on a loan calculated?
- A fixed-rate loan uses the standard amortization formula: the payment is set so that the same amount each month, split between interest and principal, pays the balance to zero at the end of the term. Early payments are mostly interest, later payments are mostly principal.
- What is the difference between the interest rate and the APR?
- The interest rate is what the lender charges on the balance. The APR (annual percentage rate) also folds in upfront fees like an origination fee, so it reflects the true yearly cost of borrowing. When comparing offers, compare APRs, not just rates.
- Do extra payments really save money?
- Yes. Every extra dollar goes straight to principal, which shrinks the balance that interest is charged on for every month afterwards. On a 5-year, $20,000 loan at 8%, an extra $50 a month saves several hundred dollars in interest and cuts months off the term. Check that your lender has no prepayment penalty first.
- Should I pick a shorter or longer loan term?
- A shorter term means a higher monthly payment but far less total interest. A longer term lowers the payment but costs more over time. Choose the shortest term whose payment fits comfortably in your budget, and use extra payments on a longer loan if you want flexibility.
- What is an origination fee?
- An origination fee is a one-time charge for processing the loan, usually 1% to 8% of the amount on personal loans. Most lenders deduct it from the money you receive, so a $10,000 loan with a 5% fee pays out $9,500 while you still repay $10,000 plus interest.
Want a plan to pay off your loans faster?
Warren AI can look at all your debts together and show you where extra payments do the most good.