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This calculator uses the standard amortization formula for fixed-rate loans. Results are estimates and may differ from lender offers.
How loan payments work
A loan payment is typically split into principal (the amount you borrowed) and interest (the cost of borrowing). With a fixed-rate amortizing loan, the payment amount stays the same, but early payments usually include more interest. Over time, a larger share goes toward paying down the principal.
What affects the monthly payment?
- Loan amount: higher amount = higher payment.
- APR / interest rate: higher rate = higher interest cost.
- Loan term: longer term = lower payment, but often higher total interest.
- Payment frequency: monthly vs weekly changes payment size and timing.
FAQ
Is this loan calculator accurate?
It uses standard formulas, but lenders may include fees, compounding differences or insurance.
What is APR?
APR is an annual rate that represents the cost of borrowing. It may include fees depending on region and lender.
How can I reduce total interest?
A lower interest rate, a shorter term, and extra payments (if allowed) typically reduce total interest paid.