Loan Payment Calculator
Calculate your monthly loan payment and total interest cost.
Monthly Payment
$483.32
Total Paid
$28,999.20
Total Interest
$3,999.20
Loan amortization basics
This calculator uses the standard amortization formula: M = P[r(1+r)^n] / [(1+r)^n - 1], where P is the principal, r is the monthly interest rate, and n is the number of payments. Each payment covers both interest and principal.
Understanding interest
In the early months of a loan, most of your payment goes toward interest. Over time, a larger portion goes toward principal. On a $25,000 loan at 6% for 5 years, you pay about $3,999.20 in total interest over the life of the loan.
Paying off debt vs investing
If your loan charges 6% interest and your investments return 10%, the math favors investing. But debt carries guaranteed cost while investment returns are uncertain. Many people use a balanced approach: pay off high-interest debt first, then invest the rest.
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