Loan payment

Loan payment: the basics

Estimate the equal monthly payment on a fixed-rate loan and separate repayment of the borrowed amount from interest.

How to use the inputs

• Loan amount: Enter the amount borrowed, without adding fees unless you intend to finance them as principal.
• Annual interest rate: Enter the assumed annual interest percentage, from 0 to 50. This is not a lender quote.
• Loan term: Choose a whole-year term from 1 to 50; each year contains 12 payments.

Change an input to update the results. Add up to four scenarios to compare separate assumptions; reset affects only the selected scenario.

Understanding the results

• Monthly payment is the modeled equal payment. Total repaid adds every full-precision payment; total interest is that sum minus the original loan.
• The chart shows the remaining balance immediately after each year’s payments. A longer term can reduce the monthly payment while increasing total interest.

The formula, in words

Monthly payment A = P × r ÷ (1 − (1 + r) raised to −n).

P is principal. R is the annual percentage entered; r = R ÷ 1200 is the monthly decimal rate. Y is years and n = 12 × Y is the number of monthly payments.

At 0%, A = P ÷ n. Total repaid = A × n; total interest = total repaid − P.

With m payments remaining, balance = P × (1 − (1 + r) raised to −m) ÷ (1 − (1 + r) raised to −n). At 0%, balance = P × m ÷ n. This values the payments still owed and avoids subtracting large compounded amounts.

Assumptions and limits

• Borrowing occurs at the start. Interest accrues monthly using the annual percentage divided by 1200; equal payments are made at month-end.
• The rate is fixed. There are no extra payments, payment holidays, fees or insurance in the calculation. Local lender compounding and repayment conventions are not applied automatically.
• Totals and chart balances use the full-precision payment, not the displayed rounded payment and not a payment rounded to cents. Multiplying the displayed monthly number can therefore differ from total repaid.

Currency results display whole units; other numbers show at most one decimal place. Calculations keep full precision unless whole units must be rounded up for break-even. Rounded figures may not add up exactly.

Examples below use USD and local number formatting. Country selection changes currency labels, formatting and terminology; it does not convert money or automatically apply local tax or lender rules.

Worked example

This fixed example uses the calculator’s default inputs; it does not change when you edit a scenario. Any example interest or return rate is an assumption, not a guaranteed outcome.

Loan amount

USD 250,000

Annual interest rate

6.5%

Loan term

25 years

There are 25 × 12 = 300 payments. With r = R ÷ 1200, the formula gives a displayed monthly payment of USD 1,688. Multiplying its full-precision value by 300 gives USD 506,405; subtract USD 250,000 to get USD 256,405 of interest.

Monthly payment

USD 1,688

Total repaid

USD 506,405

Total interest

USD 256,405

Common questions

Why does the displayed payment times the term differ from total repaid?

The screen rounds currency to whole units, but the calculation retains the full-precision payment internally. The total is calculated before display rounding.

What changes at 0% interest?

The principal is split equally across all monthly payments. There is no interest, and the remaining balance falls in a straight line.

Will this match my lender’s EMI or repayment schedule?

Not necessarily. The EMI label used for India does not change the math. A lender may round each payment, charge fees or use different interest and timing conventions.