Loan Calculator – Monthly Payment (EMI), Interest and Schedule
Work out the monthly payment of any loan, the total interest you will pay and a year-by-year amortization schedule — and see what extra payments save.
The monthly payment (EMI) is P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where P is the loan, r the monthly rate and n the number of months. A $25,000 loan at 8.5 % for 5 years costs about $512.91 a month and $5,775 in total interest.
How to use Loan Calculator
- Enter the loan amount.
- Enter the yearly interest rate from your loan offer.
- Enter the term in years or months.
- Optionally add an extra monthly payment to see how much faster you finish.
- Read the monthly payment, total interest and the amortization schedule.
How the monthly payment is calculated
Most personal loans, car loans and mortgages are amortizing loans: you pay the same amount every month, and each payment covers that month’s interest plus a piece of the principal. The fixed payment — called EMI (equated monthly instalment) in many countries — follows this formula:
EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
P is the amount borrowed, r is the yearly rate divided by 12 (as a decimal) and n is the number of monthly payments. Early payments are mostly interest; later ones are mostly principal, because interest is charged on a shrinking balance.
Example: $25,000 over 5 years
| Rate | Monthly payment | Total interest |
|---|---|---|
| 6 % | $483.32 | $3,999 |
| 8.5 % | $512.91 | $5,775 |
| 12 % | $556.11 | $8,367 |
A few percentage points make a big difference over the life of a loan, which is why comparing offers by their annual rate — or better, the APR including fees — pays off.
The power of extra payments
Any amount you pay on top of the EMI goes straight to the principal. In the example above, adding just $100 a month at 8.5 % clears the loan in 49 months instead of 60 and saves about $1,166 in interest. Check first that your lender allows early repayment without a penalty.
Shorter or longer term?
A longer term lowers the monthly payment but raises the total interest. A shorter term costs more each month but much less overall. Choose the shortest term whose payment still fits comfortably in your budget, with room for emergencies.
What the calculator does not include
Insurance, arrangement fees and taxes are not part of the result, and variable-rate loans change when the rate changes. Use the APR from the official offer for the most realistic figure. Paying down a credit card instead? Use the Credit Card Payoff Calculator. To see what saving instead of borrowing would bring, try the Compound Interest Calculator.
You may also find these free tools useful: Compound Interest Calculator, Fuel Cost Calculator and Electricity Cost Calculator.
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Frequently asked questions
How do I calculate a monthly loan payment?
Use EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), with r the monthly rate and n the number of months — or simply enter amount, rate and term in the calculator.
What is EMI?
EMI stands for equated monthly instalment: the fixed amount you pay every month until the loan is repaid. It includes both interest and principal.
How much will a $25,000 loan cost per month?
At 8.5 % over 5 years, about $512.91 a month, with roughly $5,775 of interest in total.
Do extra payments really save money?
Yes. Extra money reduces the principal immediately, so less interest is charged every following month and the loan ends sooner.
Is the result the same as my bank’s offer?
It should be very close for a fixed-rate loan. Small differences come from fees, insurance and the way a bank rounds or counts days.
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