Monthly payment calculator

How it works

This calculator estimates your monthly payment based on the key terms of a loan. It supports both Interest-Only and Amortized payment types so you can see how different structures affect cash flow.

Select Payment Type — Choose whether your loan is Interest Only (you pay only interest each period) or Amortized (you pay principal + interest over time).

Enter Loan Amount — The total principal you plan to borrow.

Enter Interest Rate — The annual interest rate charged on the loan.

Adjust Term & Amortization — Specify the loan term and amortization period to reflect how long payments are spread.

Calculate — Click Calculate to get your estimated monthly payment amount.

Use this tool to quickly understand how changes in rate, term, or structure affect your estimated monthly cost. It’s ideal for early stage underwriting, borrower conversations, and basic scenario planning.

Formula Breakdown

The estimated monthly payment is based on a standard financial formula that accounts for principal, interest, and the payment schedule. For amortized loans, the calculator applies the fixed-payment formula used by lenders to spread both principal and interest evenly across monthly payments:

Monthly Payment = 𝑃 × 𝑟(1+𝑟)𝑛 / (1+𝑟)𝑛−1

Where:

P = Loan Principal (the amount borrowed)

r = Monthly interest rate (annual rate ÷ 12)

n = Total number of monthly payments (term × 12)

This formula produces a fixed monthly payment that fully repays the loan by the end of the amortization period.

For interest-only loans, the monthly payment is simpler. you pay only the interest accrued each period.

Interest-Only Payment = 𝑃×𝑟

Where:

P = Loan Principal

r = Monthly interest rate

Interest-only payments do not reduce principal. They only cover the cost of borrowing during the interest-only period.

Note: This calculator provides estimates for comparison and planning. Actual lender payment schedules may vary based on fees, compounding conventions, and product features.