Calculate monthly loan payments, total interest, and amortization schedules for mortgages, auto loans, and personal loans. Get personalized recommendations for better loan terms.
Each monthly payment has two parts: principal (paying down the loan balance) and interest (the cost of borrowing). Early payments are mostly interest, while later payments are mostly principal. This is called amortization.
The good news? Any extra payment goes directly to principal, reducing both your balance and the total interest you'll pay. Even small extra payments can save thousands over the loan term.
15-30 year terms, 3-7% rates. Backed by property as collateral.
3-7 year terms, 4-8% rates. Vehicle serves as collateral.
2-7 year terms, 6-15% rates. Usually unsecured debt.
Shorter terms mean higher monthly payments but much less total interest. Longer terms mean lower monthly payments but significantly more interest over time. Choose based on your monthly budget and whether you prefer lower payments or lower total cost.
Consider refinancing when rates drop by at least 0.5-1%, your credit has improved significantly, or you want to change your loan term. Factor in closing costs - you typically need to save at least $100-200 monthly to make refinancing worthwhile.
Extra payments can save dramatic amounts. On a $300,000 30-year mortgage at 6%, paying an extra $200 monthly saves about $153,000 in interest and pays off the loan 9 years early. Even $50 extra monthly makes a meaningful difference.
For the best rates, aim for 740+ credit score. You can still get loans with lower scores, but rates increase significantly. A 620 score might mean paying 1-2% more than someone with 800+ credit - which can cost tens of thousands over a mortgage term.
M = P[r(1+r)ⁿ]/[(1+r)ⁿ-1]
Where M = monthly payment, P = principal loan amount, r = monthly interest rate (annual rate ÷ 12), and n = total number of payments (years × 12).