Calculator
Enter all monetary amounts in the same currency. Results do not convert currency or replace lender, tax or investment documentation.
| Balance after month 12 | 16,538.04 |
| Balance after month 24 | 12,825.82 |
| Balance after month 36 | 8,845.23 |
| Balance after month 48 | 4,576.9 |
| Balance after month 60 | 0 |
Method and inputs
Formula: payment = P x r(1+r)^n / ((1+r)^n - 1)
Inputs: Loan amount, fixed annual interest rate and loan term in years.
Worked example
A $20,000 loan at 7% for five years has an estimated monthly principal-and-interest payment of about $396.02.
Where the first payments go
A $20,000 loan at 7% over 5 years has a fixed payment of $396.02 a month. Early payments are mostly interest because interest is charged on the outstanding balance:
| Month | Interest | Principal | Balance after |
|---|---|---|---|
| 1 | $116.67 | $279.36 | $19,720.64 |
| 2 | $115.04 | $280.99 | $19,439.66 |
| 3 | $113.4 | $282.63 | $19,157.03 |
| 30 | $65.34 | $330.69 | $10,870.25 |
| 60 | $2.3 | $393.73 | $0 |
Total interest over the loan is about $3,761. Extra payments made early reduce the balance on which every later month's interest is calculated, so they save more than the same amount paid near the end.
Important limits
The schedule assumes every payment is made on time, at a fixed rate and without extra payments or fees. Actual lender disclosures control the terms of your loan.