Finance

Payment Calculator

Calculate monthly loan payments, total interest, and total cost for any fixed-rate loan. Works for mortgages, auto loans, personal loans, and more.

Quick Answer

A $200,000 loan at 7% for 30 years has a monthly payment of $1,331. Over the life of the loan, you'll pay $279,000 in interest — more than the original loan amount.

Loan Details

$
%
Monthly Payment
$1,330.60
Principal
$200,000
Total Interest
$279,018
58.2% of total
Total Cost
$479,018
Principal (41.8%)Interest (58.2%)

Yearly Breakdown

YearPrincipalInterestBalance
1$2,032$13,936$197,968
2$2,178$13,789$195,790
3$2,336$13,631$193,454
4$2,505$13,462$190,949
5$2,686$13,281$188,263
6$2,880$13,087$185,383
7$3,088$12,879$182,295
8$3,312$12,656$178,983
9$3,551$12,416$175,432
10$3,808$12,160$171,625
11$4,083$11,884$167,542
12$4,378$11,589$163,164
13$4,695$11,273$158,469
14$5,034$10,933$153,436
15$5,398$10,569$148,038
16$5,788$10,179$142,250
17$6,206$9,761$136,043
18$6,655$9,312$129,388
19$7,136$8,831$122,252
20$7,652$8,315$114,600
21$8,205$7,762$106,395
22$8,798$7,169$97,597
23$9,434$6,533$88,162
24$10,116$5,851$78,046
25$10,848$5,120$67,198
26$11,632$4,335$55,566
27$12,473$3,495$43,094
28$13,374$2,593$29,719
29$14,341$1,626$15,378
30$15,378$589$0
Disclaimer: This calculator provides estimates for informational purposes only and should not be considered financial advice. Consult a qualified financial advisor for personalized guidance.

About This Tool

The Payment Calculator uses the standard time value of money formula to determine your monthly loan payment for any fixed-rate loan. Enter the loan amount, interest rate, and term, and the calculator shows your monthly payment, total interest, total cost, and a year-by-year breakdown of how payments split between principal and interest.

The Time Value of Money Formula

Every loan payment is calculated using the present value of an ordinary annuity formula. It ensures each equal payment covers both the interest charge for the month and a portion of the principal, fully repaying the loan by the end of the term. The formula accounts for the time value of money — the principle that a dollar today is worth more than a dollar in the future because of its earning potential.

How Interest Rates Affect Your Payment

Small changes in interest rate have outsized effects over long loan terms. On a $300,000, 30-year loan, the difference between 6% and 7% is $199 more per month — and $71,700 more in total interest over the life of the loan. That single percentage point effectively costs you a year's salary in extra interest. This is why rate shopping and improving your credit score before borrowing can be worth tens of thousands of dollars.

Short-Term vs. Long-Term Loans

Borrowers face a classic trade-off between monthly affordability and total cost. A 15-year mortgage has higher monthly payments than a 30-year but costs dramatically less overall. On $250,000 at 7%, the 15-year loan costs $155,000 in interest versus $349,000 for 30 years. Many borrowers compromise with a 20-year term for a middle-ground payment and reasonable total cost.

Beyond Principal and Interest

Remember that your total monthly housing payment may include property taxes, homeowners insurance, PMI (if your down payment is under 20%), and HOA fees. Auto loans may come with gap insurance or extended warranties rolled into financing. This calculator shows the P&I component — your actual total payment depends on these additional costs, which vary by lender and situation.

Frequently Asked Questions

What formula is used to calculate loan payments?
This calculator uses the time value of money (TVM) formula for an ordinary annuity: PMT = PV × [r(1+r)^n] / [(1+r)^n - 1], where PV is the present value (loan amount), r is the periodic interest rate (annual rate divided by 12), and n is the total number of payments. This is the standard formula used by banks and financial institutions worldwide.
Does this calculator work for any type of loan?
Yes, the math is the same for any fixed-rate, fully amortizing loan — mortgages, auto loans, personal loans, student loans, and more. Simply enter the loan amount, annual interest rate, and term in years. The calculator assumes fixed monthly payments with no fees or variable rates.
How does the loan term affect total interest paid?
Longer terms dramatically increase total interest. A $200,000 loan at 7% costs $79,000 in interest over 15 years but $279,000 over 30 years — nearly 3.5x more interest for double the term. The monthly payment is lower with a longer term ($1,798 vs. $1,331), but the total cost difference is staggering.
What is the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal. APR (Annual Percentage Rate) includes the interest rate plus other fees and costs (origination fees, closing costs, etc.), expressed as a yearly rate. APR gives a more complete picture of the loan's true cost. This calculator uses the interest rate; your actual APR may be slightly higher.
Can I use this to calculate mortgage payments?
Yes, for the principal and interest portion. A mortgage payment may also include property taxes, homeowners insurance, PMI, and HOA fees (often called PITI). This calculator shows P&I only. For a complete mortgage payment estimate, use our dedicated Mortgage Calculator.

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