Payment Calculator

How to use this calculator

1. Under What is fixed?, choose Fixed term or Fixed payments.
2. Enter the loan amount and the interest rate.
3. With a fixed term, add the loan term in years; with fixed payments, add the monthly pay you can afford.
4. Read the answer, then the ring and totals beneath it, and open the amortization schedule for the year-by-year or month-by-month detail.

A worked example, from either end

A $200,000 loan at 6% over 15 years costs $1,687.71 a month. Across 180 payments that is $303,788.46 — the $200,000 borrowed plus $103,788.46 of interest, so 34% of everything you pay is the cost of borrowing.

Now fix the payment instead. Paying $2,000 a month on the same loan clears it in 11 years, 7 months — 139 payments totalling $277,951.56, of which $77,951.56 is interest. Paying $312.29 more each month finishes three and a half years sooner and saves nearly $26,000, because every extra dollar removes the interest it would otherwise have attracted.

Reading the schedule

The payment never changes, but where it goes does. In year one of the fixed-term example, $11,769.23 of the $20,252.56 paid is interest and only $8,483.33 reduces the balance. By year nine that has reversed: $6,559.25 interest against $13,693.31 of principal. Interest is charged on what you still owe, so it shrinks as the balance does.

Two questions, one tool

Choose Fixed term when you know how long you want the loan to run and need the payment that fits it. Choose Fixed payments when you know what you can pay each month and want to know how long you will be paying. They are two sides of the same amortization math approached from opposite ends, which is why the schedule and totals underneath are identical either way.

The formulas

Fixed-term mode uses the standard amortization formula:

M = P · r · (1 + r)ⁿ / ((1 + r)ⁿ − 1)

Fixed-payments mode rearranges it to solve for the number of months:

n = −ln(1 − P · r / M) / ln(1 + r)

• M — the monthly payment
• P — the loan amount
• r — the monthly interest rate (annual rate ÷ 12)
• n — the number of monthly payments

A worked example: solving for the payment

For a $20,000 loan at 6% over 5 years, the monthly rate is 6% ÷ 12 = 0.5% and there are 60 payments. The formula returns a payment of about $386.66 a month. Over the full term you repay roughly $23,199 — about $3,199 of it interest on top of the $20,000 borrowed.

A worked example: solving for the payoff time

Flip to Fixed payments with the same $20,000 at 6%, and say you can pay $500 a month — more than the $386.66 a 5-year term requires. The calculator returns a payoff time of about 3 years, 9 months. Paying more each month clears the debt sooner and cuts the interest, because the balance falls faster.

When a loan never pays off

In Fixed-payments mode, if your monthly payment is smaller than the monthly interest charge, the balance grows instead of shrinking and the loan is never repaid. The calculator recognizes this and shows Never rather than a misleading number — the fix is simply a larger payment that clears the interest with something left over for principal.

The payment–term trade-off

Stretching a loan lowers the monthly payment but raises total interest, because you borrow the money for longer. Using the same $20,000 at 6%:

Term	Monthly payment	Total interest
3 years	$608.44	$1,903.79
5 years	$386.66	$3,199.36
7 years	$292.17	$4,542.37

The 7-year term is about $316 a month cheaper than the 3-year, but costs roughly $2,640 more in interest — the payment you feel each month versus the total the loan actually costs.

Tips and limitations

• Lower the payment with a longer term or a lower rate; weigh the lower payment against the extra total interest a longer term brings.
• The tool assumes a fixed rate and equal payments, and does not model fees, insurance or variable rates.
• Payoff totals assume a full final payment, so the very last payment may be slightly smaller in practice.

For a full breakdown of where each payment goes, see the amortization calculator; for totals and a year-by-year schedule, use the loan calculator. This is general educational information, not financial advice.