Payment Calculator
Two questions, one calculator: the monthly payment on a loan of a given term, or how long a fixed payment takes to clear the balance — with the schedule shown.
Payment Calculator: with the default inputs, answer is $500.95 per month for 5 years.
The balance being financed, after any down payment.
Annual rate on the note, before fees.
Used in payment mode.
Used in term mode — what you can actually pay each month.
- Monthly payment
- $500.95
- Time to pay off
- 5 years
- Number of payments
- 60
- Total interest
- $5,056.92
- Total of payments
- $30,056.92
- Interest as a share of the loan
- 20.2%Total interest ÷ amount borrowed.
- Interest in the first payment
- $156.25Balance × monthly rate — the part that buys you nothing.
Assumptions
- Monthly compounding at rate ÷ 12, with payments due at the end of each month.
- The note rate only — no origination fees, points, taxes or insurance.
- The term-mode answer can be fractional; the schedule shows a smaller final payment.
- Principal$25,00083%
- Interest$5,05717%
| Month | Payment | Principal | Interest | Balance |
|---|---|---|---|---|
| 1 | $500.95 | $344.70 | $156.25 | $24,655.30 |
| 2 | $500.95 | $346.85 | $154.10 | $24,308.45 |
| 3 | $500.95 | $349.02 | $151.93 | $23,959.43 |
| 4 | $500.95 | $351.20 | $149.75 | $23,608.22 |
| 5 | $500.95 | $353.40 | $147.55 | $23,254.83 |
| 6 | $500.95 | $355.61 | $145.34 | $22,899.22 |
| 7 | $500.95 | $357.83 | $143.12 | $22,541.39 |
| 8 | $500.95 | $360.07 | $140.88 | $22,181.33 |
| 9 | $500.95 | $362.32 | $138.63 | $21,819.01 |
| 10 | $500.95 | $364.58 | $136.37 | $21,454.43 |
| 11 | $500.95 | $366.86 | $134.09 | $21,087.57 |
| 12 | $500.95 | $369.15 | $131.80 | $20,718.42 |
The final payment is smaller than the rest whenever the term isn't a whole number of months.
How this is worked out
The formula
Payment given the term: PMT = P × i(1 + i)^n ÷ ((1 + i)^n − 1) Term given the payment: n = −ln(1 − P·i ÷ PMT) ÷ ln(1 + i) P = amount borrowed i = annual rate ÷ 12 n = number of monthly payments At i = 0 both collapse to straight division: PMT = P ÷ n, n = P ÷ PMT.
Open How it’s calculated above to see this worked through with your own numbers.
What you enter
- What do you want to find?
- Choose one of 2 options.The payment — I know the term · The term — I know the payment
- Loan amount
- The balance being financed, after any down payment.in dollars · 0 or more · defaults to 25000
- Interest rate
- Annual rate on the note, before fees.a percentage · from 0 to 100 · defaults to 7.5
- Term — years
- Used in payment mode.from 0 to 50 · whole numbers only · defaults to 5
- Term — extra months(under More options)
- A number.from 0 to 11 · whole numbers only · defaults to 0
- Fixed monthly payment
- Used in term mode — what you can actually pay each month.in dollars · 0 or more · defaults to 500
What you get back
- Answermain answer
- Monthly payment
- Time to pay off
- Number of payments
- Total interest
- Total of payments
- Interest as a share of the loan
- Total interest ÷ amount borrowed.
- Interest in the first payment
- Balance × monthly rate — the part that buys you nothing.
What this assumes
- Monthly compounding at rate ÷ 12, with payments due at the end of each month.
- The note rate only — no origination fees, points, taxes or insurance.
- The term-mode answer can be fractional; the schedule shows a smaller final payment.
About this calculator
There are only two questions people ask about a loan payment, and they are inverses of each other: what will the payment be over this term? and how long will it take at this payment? This calculator does both from the same amortization formula, and shows the schedule either way.
Payment mode
Give the amount, the rate and the term. The payment is the level amount that drives the balance to exactly zero on the last month. Interest is charged on the remaining balance each month, so early payments are mostly interest and later ones mostly principal — the schedule below the results shows the crossover.
Term mode
Give the amount, the rate and what you can actually pay each month. The calculator inverts the same formula for n. Two things fall out of the algebra that are worth internalising:
- A payment below the monthly interest never pays anything off. At 18% on $10,000, interest alone is $150 a month; a $140 payment leaves you deeper in debt every month, forever. The calculator refuses rather than returning a number.
- The relationship is steeply non-linear near the interest line. Just above the interest-only point, small increases in payment cut years off the term; far above it, extra dollars barely move the date.
Reading the results
Total interest is what the loan actually costs. Interest as a share of the loan puts that in proportion — a 30-year mortgage at 6.5% costs about 130% of the amount borrowed in interest, while a 5-year car loan at 7.5% costs about 20%. Interest in the first payment shows how much of month one buys you nothing; if that share is over half, the term is doing more damage than the rate.
Caveats
This is the note rate, not APR — origination fees, points and prepaid interest are excluded, so a real offer with fees costs more than shown. The schedule assumes payments arrive on time and are applied on the due date; paying late adds interest, and paying early (or adding principal) shortens the term. Fractional final periods are shown as a smaller last payment, which is how lenders handle them.
Frequently asked questions
▸What happens if my payment is less than the monthly interest?
The balance grows instead of shrinking — negative amortization. There is no term that pays it off, so the calculator returns an error telling you the minimum payment that makes progress.
▸Why is the last payment smaller?
Because a fixed payment rarely divides the balance evenly. The final month collects only the interest plus whatever principal is left, which is usually less than a full payment.
▸Does this include taxes, insurance or fees?
No. It is principal and interest only. For a mortgage add property tax, insurance, PMI and HOA; for a car add tax, title and dealer fees. Those calculators handle them.
▸How much does paying a little extra actually save?
Every extra dollar goes straight to principal and stops accruing interest for the rest of the term, so extra payments made early save the most. Run term mode with a higher payment to see the new payoff date.
▸Is the payment mode the same as a mortgage calculator?
The principal-and-interest math is identical. The mortgage calculator adds escrow items, PMI and extra-payment scenarios.
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