A loan calculator estimates the monthly payment and total interest on a fixed-rate loan from the amount borrowed, interest rate, and repayment term. It works for personal loans, auto loans, and business loans that use standard amortization.
How loan payments are calculated
Fixed-rate loans use amortization: each equal monthly payment covers the interest on the current balance plus a portion of principal. Over the term, the balance is paid to zero and the total interest depends on the rate and length of the loan.
Shorter term vs lower payment
A shorter term raises the monthly payment but sharply reduces total interest. A longer term lowers the payment but costs more overall. Adjust the term to find the balance that fits your budget.