Reference formulas and worked examples below keep their stated units. Monetary examples use USD; dimensional examples use US customary units unless labeled otherwise. Metric calculator inputs are converted to these reference units before calculation. Choosing another currency does not convert example amounts or exchange money.
How to use this loan calculator
Enter the amount financed, a fixed annual rate, and the term. Extra payments reduce principal without changing the original scheduled payment; the results compare your plan with the same loan without extras.
How the calculation works
Monthly rate r = annual interest rate ÷ 1,200. With financed principal P and n months, the scheduled payment is P × r ÷ [1 − (1 + r)^(−n)]. At 0% interest, it is P ÷ n. A term in years is converted to whole months.
Each month, interest is the opening balance × r, rounded to cents. The scheduled payment and any monthly extra reduce interest first and then principal. A one-time extra reduces the remaining principal in the selected payment month.
Payments are capped at the balance plus interest. The final contractual payment adjusts for any cent-rounding remainder. Extra-payment savings compare the same loan with no voluntary extra payments; a one-time payment after the loan is already repaid has no effect.
Worked example
A $10,000 loan at 6% over 60 months has a regular payment of $193.33. The first payment includes $50.00 interest and $143.33 principal. For a 0% loan of $1,200 over 12 months, a $300 one-time extra in month 3 pays off the loan in month 9 instead of month 12.
Limits and assumptions
Models a fixed-rate, fully amortizing loan with monthly interest and the first payment one month after funding. Daily accrual, irregular dates, variable rates, balloon payments, refinancing, prepayment penalties, and fees not included in principal are excluded. This does not compute APR.
Frequently asked questions
Can I use this for a personal loan?
Yes, for a fixed-rate personal or installment loan with monthly payments under the stated model. Include any financed fees in the amount borrowed.
Can I enter the term in years?
Yes. Switch the unit to years; the existing duration is preserved. The final duration must equal a whole number of months, from 1 to 600.
How are monthly and one-time extra payments applied?
Each payment first covers the current month’s interest and then principal. The monthly extra starts with payment 1. The one-time extra is added at the payment number you choose, capped at the remaining amount due. It has no effect if the loan is repaid before that month.
Will extra payments lower the regular payment?
No. This model keeps the original scheduled payment and shortens repayment. A lender recast, refinance, or a different allocation policy is outside this calculation.
Should I enter interest rate or APR?
Use the nominal annual interest rate. APR may include fees, so using it may not reproduce the lender’s payment schedule.
What happens with a 0% loan?
The scheduled payment is principal divided by the number of months. Extra payments can shorten the term but cannot save interest when the interest rate is zero.
References
CFPB: interest rate, APR, amount financed, and total payments