Loan inputs
Example data table
| Loan amount | APR | Term | Payments/year | Extra | Estimated payment |
|---|---|---|---|---|---|
| USD 25,000 | 9.50% | 5 years | 12 | USD 0 | ~ USD 525.00 |
| USD 250,000 | 7.25% | 30 years | 12 | USD 100 | ~ USD 1,806.00 |
| PKR 2,000,000 | 18.00% | 3 years | 12 | PKR 10,000 | ~ PKR 72,000 |
Formula used
The calculator converts the annual rate into an effective rate per payment period, based on your compounding and payment frequency: (1 + r/comp)^(comp/pay) − 1.
The scheduled payment is then calculated using the standard amortizing-loan formula: PMT = P × i / (1 − (1 + i)^−n). If the periodic rate is zero, it falls back to PMT = P / n.
Each period’s interest equals balance × i, and principal paid equals payment − interest. Extra payments reduce the balance faster and can shorten the payoff date.
How to use this calculator
- Enter the loan amount, annual rate, and term in years.
- Select your payment frequency and compounding frequency.
- Optionally add an extra payment and any origination fee.
- Click Calculate to view payment and payoff estimates.
- Review the amortization preview, then download the full schedule.
Payment drivers and sensitivity
Monthly payment is driven by principal, rate, and term. A 100,000 loan at 8.0% for 5 years is about 2,027 per month. Stretching to 10 years lowers payment near 1,213, yet total interest can rise by roughly 45,000. Even a one‑point rate change on longer terms often shifts payment about 5%. Use the graph to see balance decline over time.
Interpreting amortization totals
Payments start interest heavy because interest is computed on the current balance. In a 100,000, 8.0%, 10‑year case, the first payment may be about 667 interest and 546 principal. Later periods reverse that mix as the balance falls. Total paid equals all payments plus any fees, while total interest isolates financing cost for easy comparisons.
Compounding versus payment frequency
Compounding frequency and payment frequency can differ by contract. If interest compounds daily but you pay monthly, the periodic rate is slightly higher than APR/12. Moving from monthly (12) to biweekly (26) payments can reduce interest because principal declines sooner. Paying biweekly equals 13 monthly payments each year. Small differences compound across 120–360 periods, especially when APR exceeds 12%.
Fees, extras, and early payoff
Origination fees increase the effective cost even when the quoted payment seems manageable. A 2% fee on 100,000 adds 2,000 upfront and can generate extra interest if financed. Extra payments work as recurring principal cuts: adding 100 per period on a 10‑year plan can shorten payoff by years. The schedule shows the payoff period and any final adjustment within your monthly budget.
Using results for budgeting decisions
Use the results panel to set a safe payment target before signing. Many borrowers benchmark total debt payments under 30–36% of gross income. If the payment is high, negotiate rate, extend term cautiously, or plan future extra payments after building cash reserves. Export the CSV to compare lenders, and keep the PDF summary for approvals and budgeting reviews.
FAQs
What does “monthly payment” include?
Payment includes principal and interest for each period. If you add origination fees or extra payments, totals change. Taxes and insurance are not included unless you model them separately.
Why is my first payment mostly interest?
Interest is calculated on the opening balance, so early periods accrue more interest. As principal falls, the interest portion shrinks and more of each payment reduces the balance.
How are compounding and payments different?
Compounding defines how often interest accrues, while payments define how often you pay. Daily compounding with monthly payments can produce slightly higher costs than monthly compounding at the same APR.
What if I pay extra each month?
Extra payments reduce principal faster, which lowers interest and shortens payoff time. Even small recurring extras can remove many periods from the schedule, depending on rate and term.
Why does the final payment sometimes look smaller?
When the remaining balance plus interest is less than a full payment, the schedule ends with a reduced final amount. This is normal and reflects an exact payoff calculation.
Is the CSV/PDF schedule exact for every lender?
It’s a high‑quality estimate using standard amortization math. Lenders may use different day‑count rules, rounding, or fee handling. Always confirm the official payoff schedule with your lender.