How Loan Payments Are Calculated
Each payment covers the month's interest (remaining balance times monthly rate) with the remainder reducing principal. Early payments go mostly to interest; later payments go mostly to principal.
Reading the Amortization Schedule
The table below shows your running balance, principal paid, and interest paid year by year. Click any row to expand monthly detail.
Amortization Schedule
Year-by-year breakdown — click any year to expand monthly detail.
| Year | Total Paid | Principal | Interest | Balance |
|---|
Frequently Asked Questions
Monthly payments use the standard amortization formula: M = P*(r*(1+r)^n)/((1+r)^n-1), where P is the principal, r is the monthly interest rate, and n is the total number of payments.
The interest rate is the cost of borrowing the principal. APR includes the interest rate plus fees and other costs, making it a more complete measure of the total cost of borrowing. This calculator uses the interest rate you enter.
Total interest equals (monthly payment x number of payments) minus the original loan amount. The amortization schedule below shows interest paid year by year.
Paying extra toward principal reduces the remaining balance on which future interest is calculated, shortening the loan term and reducing total interest paid. Always check your loan agreement for prepayment terms.
Personal loan rates in the United States typically range from about 6% to 36% APR depending on creditworthiness. Auto loan rates are generally lower (4-10%) because the vehicle serves as collateral. Always compare rates from multiple lenders.
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