Find the monthly payment for a loan you want to repay in a set time, or see how long it takes to pay a loan off with a payment you choose.
Most people come at a loan from one of two directions. Either they know how long they want the loan to last, such as a 15-year mortgage or a 60-month car loan, and want to know the monthly payment. Or they know what they can afford to pay each month and want to know how long it will take to clear the debt. This calculator does both. Pick the fixed term to get a payment, or the fixed payment to get a payoff time.
Interest is charged each month at one twelfth of the yearly rate on whatever balance is left. For a fixed term, the monthly payment is the level amount that brings the balance to exactly zero after the last month. For a fixed payment, the calculator counts how many months of that payment it takes to use up the balance. Because the debt rarely ends on a whole month, the final payment is usually smaller. Early payments are mostly interest, and later ones are mostly principal.
Try the same loan over several terms. A longer term gives a lower payment but more total interest, and the shortest term you can comfortably afford usually costs the least. To test extra payments, use the fixed payment option and enter more than the regular amount. The payoff time and total interest show what the extra money saves. This works for credit cards too, though card rates and minimum payments change over time.
With a fixed term you choose how long the loan lasts and the calculator finds the monthly payment that clears it in that time. With a fixed payment you choose the amount you will pay each month and the calculator finds how long it takes to pay the loan off.
Spreading the balance over more months makes each payment smaller, but the balance stays outstanding for longer, so more interest builds up. The shortest term you can afford usually costs the least overall.
Yes. Use the fixed payment tab and enter a payment higher than the regular one. The calculator shows how much sooner the loan is paid off and how much interest you save compared with the minimum payment.
If a monthly payment is no larger than the interest that builds up in a month, none of it goes toward the balance and the loan never gets paid off. Increase the payment above the monthly interest to see a payoff time.
In the fixed payment tab it usually is. The loan rarely ends on an exact payment, so the final payment is just what remains plus a month of interest. In the fixed term tab every payment is the same.
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