What is a Loan Calculator?
A loan calculator helps you understand the true cost of borrowing money. Enter your loan amount, interest rate, and term to see your monthly EMI (Equated Monthly Installment), total interest paid, and a complete breakdown of each payment.
Whether you're planning for a mortgage, car loan, personal loan, or student loan, understanding your payment schedule helps you budget properly and compare different loan offers to find the best deal.
Calculate EMI
Know exactly what you'll pay each month before committing
Total Interest Cost
See how much extra you'll pay beyond the loan amount
Amortization Schedule
Month-by-month breakdown of principal vs. interest
Compare Scenarios
See how different rates and terms affect your costs
Common loan types this calculator works for:
- Mortgage loans — 15 or 30-year home loans, typically 6-8% APR
- Auto loans — 3-7 year terms, rates vary by credit score and vehicle type
- Personal loans — Unsecured loans with higher rates (8-25% APR typical)
- Student loans — Federal loans (5-7%) or private loans (varies widely)
- Business loans — Commercial loans with terms based on business creditworthiness
How to Get the Best Loan Terms
A small difference in interest rate or loan term can mean thousands of dollars saved. Here's how to optimize your loan:
1. Improve Your Credit Score First
A difference of 100 points can mean 2-3% lower APR. Pay down credit cards, fix errors on your report, and avoid new credit inquiries before applying.
2. Shop Multiple Lenders
Get quotes from at least 3-5 lenders. Banks, credit unions, and online lenders all compete for business. Multiple rate checks within 14-45 days count as one inquiry.
3. Consider Shorter Terms
A 15-year mortgage vs 30-year has higher payments but saves massive interest. On $300k at 7%: 15 years = $143k interest; 30 years = $418k interest. That's $275k difference!
4. Make Extra Payments
Even small extra payments reduce principal faster and cut total interest. Adding $100/month to a $200k mortgage at 7% saves $45k+ and pays off 5 years early.
5. Watch for Hidden Fees
Compare APR (includes fees) not just interest rate. Look for origination fees, prepayment penalties, and closing costs. A lower rate with high fees might cost more overall.
The 28/36 Rule
Keep housing costs under 28% of gross monthly income, and total debt payments under 36%. If you earn $6,000/month, aim for max $1,680 housing cost and $2,160 total debt payments (including credit cards, car loans, etc.).
About Our Loan Calculator
Calculate loan payments and amortization instantly with our free online loan calculator. Whether you're planning a mortgage, auto loan, personal loan, or any other financing, our tool shows your monthly payment, total interest, and complete payment schedule.
With our calculator, you can:
Calculate your monthly EMI payment instantly
See the total interest you'll pay over the loan term
View principal vs interest breakdown for each payment
Get a complete amortization schedule (monthly or yearly)
Visualize balance reduction over time with charts
EMI Formula
EMI (Equated Monthly Installment) is calculated using the following formula:
EMI = P × r × (1 + r)ⁿ / ((1 + r)ⁿ - 1)
Where:
- P = Principal loan amount
- r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
- n = Total number of monthly payments
Loan Calculation Example
For a $100,000 loan at 7% annual interest for 30 years:
P = $100,000
r = 7% ÷ 12 ÷ 100 = 0.00583
n = 30 × 12 = 360 months
EMI = 100,000 × 0.00583 × (1.00583)³⁶⁰ / ((1.00583)³⁶⁰ - 1)
EMI = $665.30 per month
Total Payment = $665.30 × 360 = $239,508
Total Interest = $239,508 - $100,000 = $139,508
Over 30 years, you'll pay $139,508 in interest – more than the original loan amount!
Understanding Amortization
Amortization is the process of spreading loan payments over time. Each payment consists of two parts:
Principal Portion
The part that reduces your loan balance. This increases over time.
Interest Portion
The cost of borrowing, calculated on remaining balance. This decreases over time.
In the early years of a loan, most of your payment goes toward interest. As the balance decreases, more goes toward principal. This is why extra principal payments early in the loan can save significant interest.
Common Loan Types
| Loan Type | Typical Term | Typical Rate |
|---|---|---|
| Mortgage | 15-30 years | 6-8% |
| Auto Loan | 3-7 years | 5-10% |
| Personal Loan | 1-7 years | 8-25% |
| Student Loan | 10-25 years | 4-8% |
| Home Equity | 5-30 years | 7-12% |
Frequently Asked Questions
What is EMI?
EMI stands for Equated Monthly Installment. It's a fixed payment amount made by a borrower to a lender at a specified date each month. EMIs consist of both principal and interest components.
How can I reduce total interest paid?
You can reduce total interest by: (1) choosing a shorter loan term, (2) making extra payments toward principal, (3) refinancing to a lower rate, or (4) making bi-weekly payments instead of monthly.
Should I choose a shorter or longer loan term?
Shorter terms have higher monthly payments but lower total interest. Longer terms have lower monthly payments but cost more overall. Choose based on what you can comfortably afford monthly.
What's the difference between fixed and variable rate loans?
Fixed-rate loans have the same interest rate throughout the term. Variable-rate loans can change based on market conditions. This calculator assumes a fixed rate.
How does making extra payments help?
Extra payments go directly toward reducing principal. This reduces the balance on which interest is calculated, saving you money and shortening your loan term.
Loan Tips
Compare rates: Even a 0.5% difference can save thousands over the loan term
20% rule for mortgages: Put down 20% to avoid private mortgage insurance (PMI)
Pay bi-weekly: Making half-payments every two weeks results in 13 full payments per year
Round up payments: Rounding your payment up to the nearest $50 or $100 reduces your term
Use our loan calculator above to plan your borrowing, compare different loan scenarios, and understand exactly how your payments are applied over time.