Payment Calculator
Calculate monthly payment amount for loans
About This Calculator
The Payment Calculator determines your monthly payment amount for loans based on the loan amount, interest rate, and loan term. This tool helps you understand your payment obligations before taking out a loan.
How It Works
- 1
Enter the total loan amount you want to borrow.
- 2
Input the annual interest rate as a percentage.
- 3
Select the loan term (repayment period in years).
- 4
The calculator computes your fixed monthly payment amount.
Formula Explanation
M = P × [r(1+r)^n] / [(1+r)^n - 1]Where M is the monthly payment, P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12). This is the standard amortization formula for fixed-rate loans.
Tips
Higher interest rates and longer terms increase total interest paid.
Shorter loan terms result in higher monthly payments but lower total cost.
Use this to determine if you can afford a loan before applying.
Consider additional fees and insurance costs separately.
Compare payment amounts across different loan offers.
Common Uses
Loan Planning
Calculate monthly payments before applying for loans.
Budget Planning
Determine if loan payments fit within your monthly budget.
Loan Comparison
Compare monthly payments across different loan options.
Affordability Assessment
Assess whether you can afford a loan based on payment amount.