Your monthly payment of $478.88 includes both principal and interest. Over the 5-year term, you'll pay $3,732.80 in interest, which is 14.9% of your original loan amount.

Tip: Making extra payments can significantly reduce your total interest paid. For example, an extra $50/month would save you approximately $750 in interest and pay off your loan 7 months earlier.

How Our Loan Calculator Works

The loan calculator uses the standard amortization formula to determine your monthly payments. The calculation considers:

Principal Amount: The total amount borrowed
Annual Interest Rate: Converted to monthly rate for calculation
Loan Term: Total duration in months (years × 12)

The formula used: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1 ]

Where M is monthly payment, P is principal, i is monthly interest rate, and n is number of payments.

Frequently Asked Questions

What's the difference between fixed and adjustable rate loans? +

Fixed-rate loans maintain the same interest rate throughout the entire loan term, providing predictable payments. Adjustable-rate loans (ARMs) have interest rates that can change periodically based on market conditions, which may result in lower initial rates but uncertain future payments.

How does loan term affect my payments? +

Longer loan terms (e.g., 30 years) result in lower monthly payments but higher total interest paid over the life of the loan. Shorter terms (e.g., 15 years) have higher monthly payments but significantly less total interest.

Are the calculator results accurate for all loan types? +

Our calculator provides accurate estimates for standard amortizing loans. For specialized loans (interest-only, balloon payments, etc.), consult with your lender for precise calculations. The calculator assumes consistent monthly payments and doesn't account for fees, insurance, or taxes.