What Is a Loan Calculator?
A loan calculator works out your monthly payment, total interest, and full repayment schedule from a loan amount, interest rate, and term. This one also handles a down payment, a balloon payment, and annuity-due timing, so you can model financing a basic calculator can't.
How to calculate a loan payment in 4 steps:
- Enter the loan amount and, if any, a down payment.
- Enter the annual interest rate, compounding frequency, and loan term.
- Add a balloon payment if the loan ends with a lump sum, and set the payment timing.
- Read the payment, total interest, and full amortization schedule instantly.
Loan Payment Example
Borrow $20,000 at 6% annual interest over 5 years (60 monthly payments): the payment is about $386.65/month, with roughly $3,199 total interest. Add a $5,000 balloon payment due at the end, and the monthly payment drops to about $315.00, since part of the loan is repaid as a lump sum instead of monthly.
When to Use a Balloon Payment or Annuity Due
Balloon payments show up in car dealership financing, seller-financed property deals, and short-term business loans, where a lower monthly payment matters more than paying the loan off on a fixed schedule. Annuity-due timing applies when a payment is due at the start of each period instead of the end, as with most lease and rental agreements, so those cash flows compound one period earlier.
Loan Calculator FAQ
How do I calculate a monthly loan payment?
Enter the loan amount, annual interest rate and loan term. The calculator uses an annuity repayment model by default and shows the periodic payment, total interest and total amount repaid.
What is an amortization schedule?
An amortization schedule shows every payment over the loan term and separates each payment into principal and interest while tracking the remaining balance.
How do down payments and balloon payments affect a loan?
A down payment reduces the amount financed. A balloon payment moves part of the repayment to the end of the term, which can lower regular payments but changes the repayment profile and total interest.
Can the calculator find the loan amount, rate or term?
Yes. Select the value you want to calculate, then provide the other loan details. The calculator can solve for payment, loan amount, interest rate or term.
What's an annuity due loan payment?
It just means the payment is due at the start of each period instead of the end, like rent. Most loans (mortgages, car loans) use the opposite, end-of-period payments, but a few leases and contracts use annuity due. Switch the payment timing option to match yours.
Can I use a down payment and a balloon payment together?
Yes. The down payment reduces what you're financing up front, and the balloon payment is a larger lump sum due at the end. You can set both at the same time to match a real loan offer.
Does compounding frequency actually change what I pay?
A little, even at the same interest rate. Interest that compounds monthly grows slightly faster than interest that compounds yearly. It's a small difference on most loans, but worth checking if your lender states a compounding period.
What is the loan payment formula?
For a standard loan with no down payment or balloon, the formula is PMT = P × r(1+r)^n / [(1+r)^n − 1], where P is the loan amount, r is the interest rate per period, and n is the number of payments. This calculator extends that formula to also account for a down payment, a balloon payment, and annuity-due timing.
