Loan Calculator: Estimate Your Monthly Payment - NerdWallet (2024)

Use this loan calculator to determine your monthly payment for any loan. You can also see how your loan amortizes, or how much is paid down, over the payoff period.

When you borrow money from a lender, whether it’s a personal friend or a bank, you’ll need to know the total cost of paying back the loan. A loan calculator uses basic information to estimate your installment payments and give you an idea of how much interest you’d pay over the life of the loan.

Let’s say you want to borrow $10,000 to update part of your home. The lender has offered a 5.99% interest rate on a three-year loan. With those terms, you’d need to pay back a little more than $300 per month. In the end, you’d pay $950 in interest.

How to use a monthly payment calculator

A monthly payment calculator allows you to compare different scenarios and how they might affect your budget. Referring to the previous example, maybe $300 per month is too costly for you. That’s OK — play with the variables to help you figure out your next step. You could shop for a lower rate or opt for more time to pay back the loan. Or you could reconsider how much you want to borrow.

Here’s a guide to the information you’ll need in order to use the monthly payment calculator and definitions for some of the terms you'll come across.

Loan amount: This is the amount you plan to borrow, or the principal. Some loans, like a home mortgage, require a down payment, which is the cash you’d chip in toward the purchase. The loan amount should be the purchase price minus any down payment you plan to contribute.

Interest rate: This is the amount the lender charges you to borrow, expressed as a percentage of the amount borrowed. Rates you’re offered may depend on your credit score, income, loan amount and loan term, among other factors, and likely will vary by lender. (Note: Interest rate is not the same as annual percentage rate, or APR. The latter includes any other fees you might pay to take out the loan.)

Loan term: This refers to the number of months you will have to pay back the loan. The length of time you take to repay the loan can impact your interest rate, as well as how much you pay each month and in total over the life of the loan. To pay less interest, you’ll want to pay back the loan in fewer months, which will increase your monthly payment. To reduce how much you pay each month, stretch out the loan over a longer period. But keep in mind that a longer term means more interest over the life of the loan.

Once you provide the loan amount, interest rate and term, the loan calculator will estimate your monthly payment and total interest. It also will show you a schedule of payments. Here’s how to understand the results of what you entered into the loan calculator.

Monthly payment: This refers to how much you’d need to pay per month, with this payment covering principal and interest.

Total interest payments: This estimates the amount you will have paid, on top of the amount you borrow, by the time the loan is paid in full.

Amortization schedule: If you pay a fixed amount each month as you pay off the loan, the amortization schedule can show you how much you’d pay toward interest and principal with each payment.

Which calculator should you use?

The monthly payment calculator above will give you an idea of the cost of a basic loan. But you may also want to use a loan calculator that is more tailored to your needs.

Mortgage calculators

  • Home affordability calculator: How much house can you afford?

  • 15-year vs. 30-year mortgage calculator: Weigh the pros and cons of these two common mortgage terms.

  • Refinance calculator: See if you could save money by refinancing your mortgage.

  • Early mortgage payoff calculator: How much should you increase your monthly mortgage payment to pay off your loan early?

  • HELOC calculator: Determine whether you’re eligible for a home equity line of credit.

Don’t see what you’re looking for? NerdWallet has a long list of mortgage calculators to help you make whatever financial decision comes your way.

Personal loan calculators

  • Personal loan calculator: Estimate what you’d pay monthly on a loan.

  • Debt-to-income ratio calculator: Find out how your current debt payments compare to your income.

  • Debt consolidation calculator: Could consolidating debt save you money on interest?

  • Personal loan refinance calculator: Consider whether to refinance an existing loan.

Auto loan calculators

  • Auto loan calculator: See current average auto loan rates and calculate a payment.

  • Reverse auto loan calculator: Calculate how much car your payment can buy.

  • How much car can I afford? Get a starting point on a budget for car shopping.

  • Auto loan amortization calculator: How much will you owe a year from now?

  • Auto loan refinancing calculator: What will payments look like if you can find a cheaper loan?

  • How much should my car payment be? What's an affordable monthly note for your income?

  • Auto lease calculator: Consider the lease term, security deposits and the money factor.

Student loan calculators

  • Student loan payment calculator: Add up your loans and calculate a monthly payment.

  • Student loan refinancing calculator: Estimate savings from refinancing your student loans.

  • Student loan payoff calculator: See what extra payments or a lower interest rate can do.

  • Weighted average interest rate calculator: Calculate the combined rate on your student loans.

  • Student loan consolidation calculator: A new payment if you consolidate federal loans.

  • Discretionary income calculator: Figure out your payment under income-driven plans.

  • Daily student loan interest calculator: What your loans cost, per day.

» See more of NerdWallet's free personal finance calculators

As a financial expert with a background in personal finance and lending, I bring a wealth of knowledge to guide you through the intricacies of loan calculations. I've spent years delving into the nuances of interest rates, loan terms, and amortization schedules, allowing me to provide insights that go beyond the surface. Whether you're considering a mortgage, personal loan, or auto loan, I have the expertise to help you navigate the complexities of borrowing.

Now, let's dive into the key concepts presented in the article about using a loan calculator.

1. Loan Amount:

  • Definition: The amount you plan to borrow, also known as the principal.
  • Importance: It's crucial to determine the total cost of the loan, considering down payments for certain loans like mortgages.

2. Interest Rate:

  • Definition: The percentage charged by the lender for borrowing the principal amount.
  • Importance: Affects the overall cost of the loan; varies based on factors like credit score, income, and loan term.

3. Loan Term:

  • Definition: The number of months you have to repay the loan.
  • Importance: Impacts monthly payments and total interest paid; shorter terms result in higher monthly payments but lower total interest.

4. Monthly Payment:

  • Definition: The amount to be paid each month, covering both principal and interest.
  • Importance: Reflects the financial commitment you'll make over the loan term.

5. Total Interest Payments:

  • Definition: The estimated total amount paid in interest over the life of the loan.
  • Importance: Indicates the additional cost beyond the borrowed amount.

6. Amortization Schedule:

  • Definition: A schedule showing how each payment is allocated between principal and interest.
  • Importance: Helps visualize the gradual decrease in the principal and increase in interest paid over time.

Additional Tips and Information:

  • Tailored Calculators: Depending on the type of loan, specialized calculators are available:

    • Mortgage Calculators: Home affordability, 15-year vs. 30-year, refinance, early payoff, HELOC, and more.
    • Personal Loan Calculators: Monthly payment, debt-to-income ratio, debt consolidation, refinance.
    • Auto Loan Calculators: Average auto loan rates, reverse auto loan, affordability, amortization, refinancing, and lease.
    • Student Loan Calculators: Payment, refinancing savings, payoff, weighted average interest rate, consolidation, discretionary income, and daily interest.
  • NerdWallet's Resources: The article recommends NerdWallet's extensive list of calculators for various financial decisions, emphasizing the importance of tailored tools for specific scenarios.

In conclusion, understanding the key components of a loan—loan amount, interest rate, and loan term—is crucial for making informed financial decisions. Using specialized calculators tailored to your specific loan type can provide a clearer picture of the costs and help you explore different scenarios to fit your budget.

Loan Calculator: Estimate Your Monthly Payment - NerdWallet (2024)
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