Loading calculator...
How to Calculate Loan Payments
The monthly loan payment is calculated using the standard loan formula:
M = P × [r(1+r)^n] / [(1+r)^n - 1]
Where:
- M = Monthly payment
- P = Principal amount (loan amount)
- r = Monthly interest rate (annual rate ÷ 12)
- n = Number of payments (loan term in months)
Example: For a $200,000 loan at 5% annual interest for 30 years:
- Monthly rate = 5% ÷ 12 = 0.4167%
- Number of payments = 30 × 12 = 360
- Monthly payment ≈ $1,073.64
- Total interest ≈ $186,511.57