How this calculator works
A fixed-rate loan is repaid in equal monthly payments. Each payment first covers that month’s interest (balance × monthly rate); the rest reduces the balance, so early payments are mostly interest and later ones mostly principal.
To find how much you can borrow, the same formula is run backwards from the payment. If you pay up-front fees, you receive less cash than you repay on, so the APR — the rate that matches the cash you actually get to the payments you make — is higher than the stated rate.
Assumptions and tips
- Fixed rate, monthly payments, no prepayment penalty.
- If fees are added to the loan instead of paid up front, enter the larger loan amount.
Worked example
Using the default values in the calculator above:
| Input | Value |
|---|---|
| What do you want to find? | Monthly payment |
| Loan amount | $25,000 |
| Interest rate | 7.5 % |
| Term | 5 years |
| Up-front fees | $0 |
| Result | Value |
|---|---|
| Monthly payment | $500.95 |
| Total interest | $5,057 |
| Loan amount | $25,000 |
| Total of payments | $30,057 |
| Number of payments | 60 |
| APR (with fees) | 7.5 % |
Amortization by year:
- Year 1: interest $1,730, principal $4,282, balance $20,718
- Year 2: interest $1,397, principal $4,614, balance $16,104
- Year 3: interest $1,039, principal $4,972, balance $11,132
- Year 4: interest $653, principal $5,358, balance $5,774
- Year 5: interest $237, principal $5,774, balance $0
Step by step:
- Monthly rate = 7.5% ÷ 12 = 0.625%, n = 60 payments
- Payment = $25,000 ÷ 49.905 = $500.95
- Total interest = $500.95 × 60 − $25,000 = $5,057
Monthly payment on a $10,000 loan
Payments for $10,000 at common rates and terms — scale up for larger loans.
| Rate and term | Monthly payment | Total interest |
|---|---|---|
| 6% · 3 years | $304.22 | $952 |
| 8% · 3 years | $313.36 | $1,281 |
| 6% · 5 years | $193.33 | $1,600 |
| 8% · 5 years | $202.76 | $2,166 |
| 10% · 5 years | $212.47 | $2,748 |
| 12% · 5 years | $222.44 | $3,347 |
| 15% · 5 years | $237.9 | $4,274 |
| 8% · 7 years | $155.86 | $3,092 |
Common mistakes to avoid
- Looking only at the rate and ignoring origination fees — compare APRs instead.
- Stretching the term to lower the payment without checking how much more interest it adds.
Frequently asked questions
What is the monthly payment on a $25,000 loan?
At 7.5% for 5 years it is about $501 a month, with about $5,057 of total interest.
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal. The APR adds fees spread over the loan, so it shows the full yearly cost.