How the loan calculator works
Fixed-rate installment loans (auto, personal and most student loans) use the standard amortization formula:
- P: amount financed
- r: APR ÷ 12
- n: number of monthly payments
At 0% APR the payment is simply P ÷ n. For an auto purchase, the amount financed is:
sales tax = tax rate × (price − trade-in) or tax rate × price
Most US states charge sales tax on the price after the trade-in credit; a few (for example California, Hawaii, Michigan and Virginia) tax the full price, so choose the option that matches your state. Extra payments go straight to principal; the schedule simulates each month to find the new payoff date.
Worked example
You borrow $25,000 at 7.5% APR for 60 months. r = 0.075 ÷ 12 = 0.00625 and n = 60:
Over 60 payments you pay $30,057 in total, so the interest is about $5,057. Paying an extra $100 a month ends the loan after 49 months and saves about $1,014 of interest.
Auto purchase: a $35,000 car with $5,000 down, no trade-in, 7% sales tax ($2,450) and $800 of fees means you finance 35,000 + 2,450 + 800 − 5,000 = $33,250, or about $666.26 a month over 60 months at 7.5%.
Frequently asked questions
How is a loan payment calculated?
Fixed-rate loans use the amortization formula M = P × r(1 + r)^n ÷ ((1 + r)^n − 1), where P is the amount borrowed, r is the APR divided by 12 and n is the number of monthly payments. Each payment covers that month's interest first and the rest reduces the balance.
What is the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal. APR also spreads certain fees across the loan, so it is usually a little higher. Enter the APR from your loan offer for the most realistic payment; if your fees are paid upfront rather than financed, the interest rate gives the same payment.
Is a longer loan term better?
A longer term lowers the monthly payment but raises the total interest. $25,000 at 7.5% costs about $5,057 in interest over 60 months but about $6,123 over 72 months, and longer auto loans make it more likely you owe more than the car is worth.
Do extra payments help?
Yes. Extra payments go directly to principal, so less interest builds up afterwards. Check that your lender applies extra money to principal and does not charge a prepayment penalty.
How does a trade-in affect sales tax?
In most US states, sales tax is charged on the price minus your trade-in value, so a trade-in lowers both the amount financed and the tax. A few states tax the full price. Use the 'Sales tax on' option to match your state.
Can I use this for a personal or student loan?
Yes. Any fixed-rate loan with equal monthly payments works. Income-driven student loan plans and variable-rate loans change over time, so treat the result as an estimate.
Updated October 2026. Results are estimates for education, not financial or medical advice. All math runs in your browser; nothing you type is sent anywhere.