How Our Calculators Work

Our calculators give estimates for planning. They are not loan offers, credit decisions or lender disclosures. A lender’s own Truth in Lending disclosure is the official statement of a loan’s APR, finance charge and payments.

Monthly payment

For a fixed-rate loan with equal monthly payments, the payment is P × r ÷ (1 − (1 + r)−n), where P is the amount financed, r is the yearly interest rate divided by 12, and n is the number of months. At a 0% rate the payment is simply P ÷ n.

Amortization schedule

Each month, interest is the balance times the monthly rate, rounded to the cent. The rest of the payment reduces the balance. We round the payment to the cent and let the final payment absorb any rounding difference, so the schedule ends at exactly zero. Real lenders may calculate interest daily, so their figures can differ by a few dollars.

Fees

• Taken out of the loan: you repay the full amount but receive the amount minus the fee.
• Added to the balance: you receive the full amount, and the fee is repaid with interest.

The cost of borrowing we show is everything you repay minus the money you actually receive: interest plus fees.

Estimated APR

We estimate APR as the yearly rate at which the scheduled payments are worth exactly the amount you receive, solved numerically. This follows the same idea as the Truth in Lending calculation for regular monthly payments, but a lender’s disclosure may include charges we don’t know about and may use slightly different conventions. Treat our APR as an estimate.

Paying off a balance at a fixed payment

For credit cards and other existing debts, we apply monthly interest to the balance and subtract your fixed payment until the balance reaches zero. We assume no new charges, no fees, and an unchanging rate. Real card interest is usually calculated on the average daily balance, and minimum payments usually fall as the balance drops, which makes real payoffs slower than a fixed payment.

Refinancing and break-even

We compare the remaining payments on your current loan with the full cost of a new loan, including fees. The break-even point is the fees divided by the monthly savings, rounded up to whole months. If the new loan is longer, the monthly payment can drop while the total rises; we show both.

Validation and edge cases

• Every input has a sensible range; out-of-range or non-numeric values are flagged next to the field and no result is shown until they’re fixed.
• Zero-interest loans, fees larger than the loan, payments that never cover the interest, and very long terms are handled with a plain message instead of a misleading number.
• We show money to the cent where it’s a payment and to the dollar where it’s a total, to avoid false precision.

Your numbers

Calculations run in your browser. Some tools remember your last inputs in this browser so you can come back to them; nothing is sent to us. You can clear them with each tool’s Reset button or by clearing this site’s data in your browser.

Testing

The same formulas are implemented once for the site and once as a reference script, and automated tests check that they agree on a range of loans, including zero-rate loans, fees, extra payments and refinancing cases.