📖 How to Use This Calculator
- Loan amount: The total amount you're borrowing
- Interest rate: Annual Percentage Rate (APR) offered by the lender
- Loan term: How long you have to repay (in years)
- View results: See monthly payment, total cost, and full amortization schedule
📐 The Formula
M = P × [r(1+r)ⁿ] / [(1+r)ⁿ - 1]
Where: M = Monthly payment, P = Principal, r = Monthly interest rate, n = Number of payments
Typical Loan Rates (2024)
- Auto loans: 5% - 10% (new cars), 7% - 14% (used)
- Personal loans: 8% - 25%
- Mortgages: 6% - 8%
- Student loans: 5% - 8% (federal), 4% - 14% (private)
❓ Frequently Asked Questions
APR (Annual Percentage Rate) includes the interest rate plus fees and other costs. It's the true cost of borrowing. Always compare APRs, not just interest rates.
Shorter terms mean higher monthly payments but less total interest. Longer terms lower monthly payments but cost more overall. Choose based on what you can afford while minimizing interest.
Amortization is the process of paying off debt over time with regular payments. Early payments go mostly toward interest; later payments go mostly toward principal.
Usually yes, but check for prepayment penalties. Paying extra toward principal reduces total interest and shortens your loan term.