Loan Payment Calculator


Payment Calculator

This payment calculator figures both types of monthly loan payments - interest-only vs. principal and interest.

We also have various specialized payment calculators with enhanced features to help you with figuring your car payment, mortgage payment, and credit card payment. One is certain to fit your exact needs.

Principal Owed ($):
Annual Interest rate (APR %):
Term (number of years):
Results Interest Only
Principal & Interest
Monthly Payment:

Loan Payment

Almost all of us experience a time in our lives when we need a huge amount of money. This amount of money may be used for buying a house, car, and finance education or even for vacation purposes. If you don’t have enough savings, oftentimes you will be forced to take a loan. Having a debt is not at all bad. Debts can be also used for building up investments. However, if debt is taken to pay unnecessary purchases, then it is better off without it since taking out a loan is a big obligation. It is an obligation to return the money borrowed plus interest for a certain period of time. Therefore, you must be prepared financially before you apply for a loan. It is essential that you calculate your loan payment to make sure that it fits your budget. The above interest calculator will help you calculate the monthly payment for two types of loan – interest only and principal plus interest.

Understanding Loan Payment Types

If you have a loan and you don’t understand how your loan will be paid off, you are at risk of hurting your credit score if payments are not handled properly. Regular loan payments are amortized over a period of time. This simply means that you pay the same amount each month during the entire term of the loan.

Home and car loans are normally amortized. The payment usually consists of the principal plus the interest. A bigger portion of your monthly payment is applied to the interest on the earlier stage of your loan. As time goes on, the interest payment reduces while the principal payment increases until the loan is paid off. If there are any additional payments for the loan, the payment will be applied to the principal, thus, reducing the principal amount faster. Before you increase your payment to your loan, you should ask your lender on how the extra payment will be applied. Also consult your lender if there are no penalties for accelerating your loan payments, since each lender has different rules for handling loans. You must also note that making extra payments will not reduce your monthly amortization. It will however reduce the term of the loan since you will be paying off the loan sooner.

On the other hand, interest only payment is commonly used in home loans. It is a type of loan payment wherein only the interest for the capital is paid over a certain period of time. At the end of the interest-only period, the monthly payment will be recalculated to include the principal plus interest just like a regular loan payment. If you want to run some numbers, the above loan payment calculator allows you to calculate the monthly payment required each month.

How Much Will You Pay For The Loan Each Month?

Once you understand the type of loan you are taking, it will be easier to calculate the monthly loan payments. Loan payments are usually uniform each month until the end of the loan term, except for the variable type of loan. The interest rate of a variable loan is dependent on the consumer price index. Therefore, if the consumer price index declines, the interest rate also falls which also means that your loan payment will also decrease. Calculating the estimated monthly payment for fixed loan types is made easy using the loan payment calculator. You can work out the monthly payment by just entering the loan amount, annual interest rate and the loan term.


Before taking out a loan, it is very important that you understand the guidelines and terms of your loan since banks and other money lending institutions implement different rules. To improve your probability of getting the best type of loan that fits your needs, understand how your loan works, compare and calculate the monthly payment before making a decision.

Loan Payment Terms And Definition

  • Principal – The amount borrowed or invested.
  • Annual Interest Rate – The percentage interest rate charged for borrowing money.
  • Term – The time period for which the money is borrowed or deposited.
  • Monthly Payment – The amount of money you pay for your loan each month.
  • Loan – The process of borrowing money from a lender with a promise to return after a certain period of time.
  • Amortization – The equal amount of money paid for the loan.

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