How to Use This Loan Calculator
- 1Enter your loan amount (how much you're borrowing).
- 2Input the annual interest rate (APR) from your lender.
- 3Select your loan term in years.
- 4Click Calculate Payment — see your monthly payment instantly plus a full amortization schedule below.
Understanding Loan Payments & Amortization
When you take out a loan, each monthly payment is split between interest (the cost of borrowing) and principal (reducing the balance you owe). In the early months, most of your payment goes toward interest. Over time, more goes toward principal — this is called amortization.
For example: a $25,000 personal loan at 8.5% for 5 years has a monthly payment of $512.91. Over the full term you pay $5,775 in interest — 23% of the loan. The amortization table above shows exactly how that breaks down month by month.
2026 Loan Interest Rates by Type
| Loan Type | Typical Rate (Good Credit) | Typical Term |
|---|---|---|
| New Auto Loan | 6.5% – 8.5% APR | 48 – 72 months |
| Used Auto Loan | 8% – 12% APR | 36 – 60 months |
| Personal Loan (720+ credit) | 7% – 12% APR | 2 – 7 years |
| Personal Loan (average credit) | 14% – 24% APR | 2 – 5 years |
| Federal Student Loan (2025–26) | 6.53% – 8.08% fixed | 10 – 25 years |
| Home Equity Loan | 7% – 9.5% APR | 5 – 20 years |
Source: Federal Reserve, Experian, Freddie Mac (2026). Rates vary by lender, credit score, and market conditions.
Worked Example: How Loan Term Changes What You Pay
Take a $25,000 loan at 8.5% APR. The longer you stretch it out, the lower the monthly payment but the more interest you pay overall:
- 3-year term: about $789.19 per month, with total interest of about $3,411
- 5-year term: about $512.91 per month, with total interest of about $5,775
- 7-year term: about $395.91 per month, with total interest of about $8,257
Moving from a 3-year to a 7-year term lowers the payment but costs several thousand dollars more in interest. A good rule is to choose the shortest term whose monthly payment fits comfortably in your budget. Enter the same amount, rate, and term in the calculator above to see the full amortization schedule for each option.
Fixed vs. Variable Rates, Fees, and APR
Most personal loans and auto loans have a fixed rate, so the payment never changes. Variable-rate loans can start lower but move with market rates. Always compare loans by APR, which includes the interest rate plus most fees, instead of the headline rate alone. Watch for origination fees (often 1% to 8% of a personal loan, taken out of the amount you receive) and for prepayment penalties. If a lender charges an origination fee, the calculator's payment is still based on the full loan amount, so the cash you actually receive will be lower than the amount you borrow.
Paying extra toward principal each month shortens the loan and reduces total interest, as long as the lender applies the extra amount to principal and does not charge a prepayment penalty. Check your loan agreement first. This calculator gives estimates for planning and is not financial advice.
Tips to Get a Lower Loan Rate
- Improve your credit score before applying — aim for 720+ for the best rates
- Make a larger down payment to reduce the loan-to-value ratio
- Choose a shorter term — lenders typically offer lower rates for shorter terms
- Shop and compare at least 3–5 lenders before committing (rate shopping within 14 days counts as one hard inquiry)
- Consider a credit union — they consistently beat bank rates by 1–2%
- Avoid add-ons (extended warranty, GAP insurance at signing) that inflate the financed amount