Loan payment calculator

How to calculate it

Monthly payment = P × i / (1 − (1 + i)^−N)

P is the amount borrowed, i is the nominal annual rate divided by 12, and N is the number of monthly payments. Every payment covers that month’s interest plus part of the principal. At a zero interest rate, divide the loan amount by the number of payments.

Reference: Microsoft: PMT for constant payments and interest.

Worked example

A 10,000 loan at 6% annual interest repaid over five years has a monthly payment of 193.33. Using the unrounded payment, total repayment is 11,599.68, including 1,599.68 in interest.

Assumptions and limits

• The loan has a fixed rate, equal monthly payments at period end, and no balloon balance. The rate is nominal annual interest compounded monthly, not a fee-inclusive APR.
• The term must be a whole number of months. Fees, insurance, taxes, extra payments, and payment holidays are excluded.
• Totals use the unrounded payment. A lender’s rounding, actual dates, daily interest rules, and final-payment adjustment can change the final cents.

Results use unrounded inputs and normally display two decimal places. Very small or large numbers may use scientific notation. Use consistent currency units; no currency conversion is applied.

Common questions