Monthly Payment
$0
Total Interest
$0
Total Cost
$0
Payment Breakdown
Amortization Schedule (First 12 Months)
| Month | Payment | Principal | Interest | Balance |
|---|
* Full schedule available on desktop
Understanding Loan Payments
When you take out a loan, your monthly payment goes toward both the principal (the amount you borrowed) and interest (the cost of borrowing). Understanding this breakdown helps you make better financial decisions.
How Loan Payments Work
Each monthly payment is calculated using an amortization formula that ensures your loan is paid off by the end of the term. Early payments go mostly toward interest, while later payments go mostly toward principal.
M = P × [r(1+r)^n] / [(1+r)^n – 1]
Where M = monthly payment, P = principal, r = monthly rate, n = total payments
Types of Loans
Mortgage Loans
Home loans typically 15-30 years. Rates vary by credit score and down payment.
Auto Loans
Car loans typically 3-7 years. New cars have lower rates than used cars.
Personal Loans
Unsecured loans 1-7 years. Higher rates due to no collateral.
Student Loans
Federal and private loans for education. Terms vary widely.
Tips to Save on Interest
- Make extra payments: Even small extra payments toward principal can save thousands
- Shorter term: 15-year mortgages have lower rates and much less interest
- Improve credit score: Better credit = lower interest rates
- Shop around: Get quotes from multiple lenders
- Consider refinancing: If rates drop, refinancing can save money
💡 Example: A $250,000 mortgage at 6.5% for 30 years has a monthly payment of $1,580.17. Total interest paid: $318,861. The same loan at 15 years would have a payment of $2,177.78 but only $141,800 in interest — saving $177,061!