Loan Calculator
Work out the monthly payment and total interest on a loan — and see how the two common repayment methods, equal payment and equal principal, compare for your amount and term.
Equal payment keeps the monthly amount constant for the full term.
Formula and calculation
Worked example
A $20,000 loan at 5.5% over 5 years with the equal-payment method: the monthly payment is $382.02 and total interest is $2,921.39. Choosing equal principal would instead cost $2,795.83 in interest with a larger first payment.
Which repayment method costs less?
Equal principal always costs less total interest because you repay principal slightly faster — but the payment difference is front-loaded, which stresses cash flow exactly when a new loan is most likely to strain it. On a small personal loan the interest saving is typically a few hundred dollars; on a mortgage it can be thousands. If the option exists and the early payments are comfortable, equal principal wins on cost; equal payment wins on predictability, and many people replicate most of the saving by simply paying a little extra early on.
What the results mean
- Monthly payment
- The first month's payment. With equal payment this is also every month's payment; with equal principal it is the largest payment and the rest decline.
- Final payment
- The last month's payment — equal to the first under equal payment, and noticeably smaller under equal principal.
- Total interest
- Total interest over the term under the repayment method you selected.
- Total interest, equal principal
- Total interest under the other repayment method, for comparison. Equal principal always costs less interest; equal payment keeps the monthly amount flat.
- Payoff date
- The month of the final payment, counted from the first payment date.
Frequently asked questions
What is the difference between equal payment and equal principal?
Equal payment keeps the monthly amount fixed — most of the early payments are interest. Equal principal fixes the principal portion instead, so payments start higher (more total principal repaid each month) and decline, and total interest is lower.
How do I calculate a loan payment by hand?
Use payment = P × r ÷ (1 − (1+r)^−n) with monthly rate r: for $20,000 at 5.5% over 5 years, r = 0.0045833, n = 60, and the payment comes out to about $382 per month.
How much does a longer term really cost?
Stretching the same loan from 5 to 7 years lowers the payment but adds years of interest on the remaining balance. Use the term field to compare — the total-interest row changes a lot even when the monthly payment barely moves.