How to use the loan payment
Enter loan amount, annual interest (%), and term in months. Choose the currency for your inputs and read the result as you change the values.
How it works and formula
Payment = P × r ÷ [1 − (1 + r) raised to −n], where P is principal, r is the annual percentage divided by 1200, and n is the number of monthly payments.
Worked example
| Loan amount | 10000 |
|---|---|
| Annual interest (%) | 6 |
| Term in months | 36 |
Result
Monthly payment $304.22
Total interest $951.90
Try a second calculation
Start with the USD worked example above and change only term in months to 60. Select Calculate. Your result should read:
Monthly payment $193.33
Total interest $1,599.68
Then enter 24 in the same field. Compare the result with the first scenario row. Holding every other input steady lets you see exactly how this one change affects the calculation.
Choosing your inputs
Enter the amount borrowed after any down payment, the annual rate as a percentage, and the number of monthly payments. A three-year term is 36 months. If a lender quotes a rate that includes fees, check that it matches the interest rate used to calculate scheduled instalments.
How to interpret the result
Compare monthly payment and total interest together when evaluating terms. Extending the term can lower the monthly amount while increasing interest over the life of the loan. A lender’s actual schedule may also reflect fees, payment dates or early repayments.
Frequently asked questions
What happens at zero interest?
The monthly payment is principal divided by months. The estimate assumes equal monthly payments and excludes fees.