When to use this calculator
Estimate a fixed monthly repayment for a fully amortising loan. Assumes monthly payments and interest, a fixed rate, and no fees. Use a term giving a whole number of months.
Explore the loan & repayment calculators for other questions in this topic. For a related calculation, use the Loan Payment Difference Calculator: Compare monthly payments under two fixed-rate borrowing scenarios.
Compare the term as well as the payment
A longer loan can make the monthly amount easier to afford while increasing total interest. Compare otherwise identical scenarios with different terms before drawing a conclusion. The rate in this model is a nominal annual rate applied monthly, which is not necessarily the lender’s fee-inclusive APR.
PUTTING IT INTO PRACTICE
Loan Payment: a worked example
The values below are an illustrative example, not a recommendation. Replace them with measurements or assumptions that match your question.
| Input | Example value |
|---|---|
| Amount borrowed | 20,000 |
| Annual nominal rate (%) | 6 |
| Loan term (years) | 5 |
| Result | 386.656031 per month |
- Check the input labels and enter the example values above.
- Apply the relationship: Payment = Pm ÷ (1 − (1 + m)^(-N)); m = annual rate/1200.
- The result is 386.656031 per month, rounded for display.
How to interpret your result
Assumes monthly payments and interest, a fixed rate, and no fees. Use a term giving a whole number of months.
Use a fixed-rate amortising model for loans repaid by equal monthly instalments. An interest-only payment leaves the principal outstanding. Fees and contractual APR calculations require more than the interest rate alone.
Frequently asked questions
Does this payment include arrangement fees?
Not automatically. A fee financed as part of the principal can be included in the amount borrowed, but upfront fees and statutory APR calculations require separate treatment.
Does a lower monthly payment mean a cheaper loan?
Not necessarily. Extending the term can lower payments while increasing total interest. Compare both monthly affordability and overall cost.
How do I use the loan payment calculator?
Enter amount borrowed, annual nominal rate (%), loan term (years). The result updates automatically. Use the units shown beside each input; the example values illustrate the method.
Which formula does this calculator use?
Payment = Pm ÷ (1 − (1 + m)^(-N)); m = annual rate/1200.
What should I check before using the result?
Assumes monthly payments and interest, a fixed rate, and no fees. Use a term giving a whole number of months.
How are results rounded?
Scalar numbers display up to six decimal places, with scientific notation for very large or small values. Text, fraction, date and schedule outputs use the format described on the tool. Intermediate calculations use JavaScript floating-point arithmetic. Keep sensible precision for your measurements.
Further reading
For background on this topic, see OpenStax: the basics of loans ↗. This is a topic reference, not an external review or endorsement of this tool.
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