How to Calculate Loan Payments

Most installment loans use the same amortization formula as mortgages. The difference is term length, rate, and whether the loan is secured.

Step-by-step

1. Confirm loan amount, annual APR, and term in months.
2. Convert APR to monthly rate: divide by 12.
3. Apply standard PMT formula.
4. Multiply payment by number of months for total paid; subtract principal for total interest.
5. Compare offers by total cost, not just monthly payment.
6. Enter values in our Loan Calculator for instant amortization breakdown.

Open the Loan Calculator to apply these steps with your own numbers instantly.

Frequently asked questions