The three main loan inputs
A standard fixed-rate amortized loan payment is mainly driven by the amount borrowed, the interest rate and the number of payments. A longer term usually lowers the monthly payment but can increase total interest.
Monthly rate and number of payments
For a monthly-payment estimate, the annual percentage rate is converted to a monthly rate and the term is converted to months. A 5-year loan has 60 monthly payments.
Example
For a $20,000 loan, compare a 3-year term with a 5-year term at the same rate. The 5-year option normally has a smaller monthly payment, while the total amount of interest paid over the full term is higher.
What a basic calculator does not include
Origination fees, insurance, taxes, late fees and lender-specific rules may not be included. Use the result as a planning estimate and compare it with the lender's official disclosure.
Estimate different scenarios with the Loan Payment Calculator.