Know the real cost before you borrow.
Move the sliders to see what a loan costs each month, how much of it is interest, and what you pay in total. It runs entirely in your browser. Nothing is saved or sent.
Your monthly payment
$445
- Principal
- $20,000
- Total interest
- $6,693
- Total cost
- $26,693
This is an estimate using standard amortization. Your actual rate is set by the lender from your credit profile, income, and the loan type, and some loans add an origination fee that this figure does not include.
How a loan payment is actually calculated
Every fixed-rate installment loan uses the same amortization formula. Each payment covers the interest that accrued on what you still owe, and whatever is left goes against the principal. Early on, most of your payment is interest. Later, most of it is principal. That is why paying extra in year one saves far more than paying extra in the final year.
Payment = P × r × (1 + r)n ÷ ((1 + r)n − 1), where P is the amount borrowed, r is the monthly rate (APR ÷ 12 ÷ 100), and n is the number of months.
What the term really costs you
Stretching a loan lowers the monthly payment and raises the total. Here is the same $20,000 at 12% APR across four terms, so you can see the trade-off in dollars rather than in the abstract.
Going from 24 to 84 months drops the payment from $941 to $353 a month, but total interest rises from $2,595 to $9,657. You pay about $7,000 more for the same $20,000. Use the sliders above to test your own numbers.
APR is the number that matters
The advertised interest rate and the APR are not always the same. APR folds in the origination fee and other required charges, so it is the closest thing to a true price. When you compare offers, compare APRs over the same term. A lower monthly payment on a longer term can hide a worse deal.
Three levers you actually control
- Amount: borrow only what you need. Every extra dollar carries interest for the whole term.
- Rate: the biggest lever, and mostly a function of your credit. See our credit score guides for what moves the number lenders price you on.
- Term: pick the shortest term whose payment you can comfortably afford. That single choice is usually worth thousands.
Frequently asked questions
Is a lower monthly payment always better?
No. A lower payment almost always comes from a longer term, which means more total interest. Look at total cost, not the monthly figure.
Does this calculator save my details?
No. It runs entirely in your browser. Nothing is stored, and nothing is sent to a server.
Why is my real payment higher than this estimate?
Two common reasons. Your actual APR is set from your credit profile and may be higher than the rate you assumed, and some lenders deduct an origination fee from the amount you receive while still charging interest on the full balance.
Does paying extra early actually help?
Yes, and more than most people expect. Extra payments go straight against principal, which removes all the future interest that principal would have accrued. The earlier in the term you do it, the bigger the saving.