How to compare two loan offers
A lower monthly payment is not the same as a cheaper loan. Stretching the term lowers the payment but gives interest more months to accrue, and the comparison table above shows both effects on the same loan amount. In the example, the longer loan lowers the payment by $113.31 a month but costs $1,378.10 more in total interest, even though its rate is a little lower.
Car loan amortization: how the term changes the cost
To compare your own offers, enter the amount, rate and term of the first offer, tick "Compare with a second loan offer", and enter the second. Compare total interest and total paid, and then decide whether the payment difference is worth the extra cost. The table below isolates the effect of the term alone, by holding the rate at 7.14% for every row:
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 3 years (36 months) | $1,237.65 | $4,555.25 | $44,555.25 |
| 4 years (48 months) | $960.45 | $6,101.60 | $46,101.60 |
| 5 years (60 months) | $794.69 | $7,681.56 | $47,681.56 |
| 6 years (72 months) | $684.65 | $9,294.98 | $49,294.98 |
| 7 years (84 months) | $606.45 | $10,941.67 | $50,941.67 |
Stretching the same $40,000 from 3 years to 7 years lowers the payment from $1,237.65 to $606.45 a month and raises total interest from $4,555.25 to $10,941.67, a difference of $6,386.41.
Car, personal, student and business loan amortization
Any loan with a fixed rate, a fixed term and equal monthly payments amortizes the same way, so the same calculation covers:
- Car loans. Enter the amount you finance after any down payment and trade-in, not the sticker price. Sales tax and fees roll into the amount only if you finance them.
- Personal loans. Enter the amount you receive. If the lender takes an origination fee out of the proceeds, the true cost is higher than the rate suggests, and the APR quoted to you includes it. This calculator uses the interest rate.
- Student loans. Enter the balance at the start of repayment, the rate and the term. Income-driven repayment plans change the payment over time and are not modeled here.
- Business term loans. A term loan with a fixed payment follows the same schedule. Lines of credit and loans with an interest-only period do not, so this calculator does not model them. For a loan with a large final payment, use the balloon option in the amortization calculator.
Personal loan amortization
The example rates on this page are the Federal Reserve's published averages, not offers: commercial banks reported an average of 7.14% on 60-month new-car loans, 6.97% on 72-month new-car loans and 11.86% on 24-month personal loans for the second quarter of 2026.1 Your rate depends on your credit, the lender and the loan. A $15,000 personal loan at 11.86% for 2 years has a payment of $705.12 and costs $1,922.92 in interest:
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 1 years (12 months) | $1,331.75 | $981 | $15,981 |
| 2 years (24 months) | $705.12 | $1,922.92 | $16,922.92 |
| 3 years (36 months) | $497.21 | $2,899.64 | $17,899.64 |
| 4 years (48 months) | $393.98 | $3,910.91 | $18,910.91 |
| 5 years (60 months) | $332.61 | $4,956.39 | $19,956.39 |
Paying a loan off early
Extra payments go straight to principal, so they shorten the loan and cut interest. On the $40,000 car loan at 7.14% over 5 years, an extra $100 a month saves $1,039.46 in interest and pays the loan off 7 months sooner. Tick "Add extra payments to Loan A" to try your own amount or a one-time lump sum.
Before you do, read the loan agreement for a prepayment penalty, and ask how the lender applies extra money: it should reduce principal, not simply prepay the next payment. Higher-rate debt, such as credit cards, usually deserves the extra money first; the credit card payoff calculator shows what a card balance costs.
Loan amortization schedule in Excel or Google Sheets
The Download Excel button gives you a workbook with live formulas for the loan in the form. To work out one loan yourself, the payment on the $40,000 car loan is =-PMT(7.14%/12,60,40000), which returns $794.69 (the minus sign flips PMT's negative result), and the total interest is that payment times 60 minus the loan: =-PMT(7.14%/12,60,40000)*60-40000 gives $7,681.56.2 The first month's interest is the balance times the annual rate divided by 12, $238.00, so $556.69 of the payment is principal and the balance falls to $39,443.31; each later row starts from the last row's ending balance. Excel's IPMT and PPMT functions give the same split for any payment number.
To compare two offers in a sheet, put the amount, rate and number of months of each in its own column and use the same two formulas under each. The payment and the total interest then sit side by side, which is what the comparison table above shows. The same formulas work in Google Sheets.2
Frequently asked questions
What is a loan amortization schedule?
It is a table of every payment on a fixed-rate loan, split into interest and principal, with the balance left after each payment. Early payments are mostly interest and later payments mostly principal. The yearly summary and the full month-by-month schedule above are the loan amortization schedule for your numbers.
How do I compare two loans?
Compare total interest and total paid, not only the monthly payment. Enter the first offer's amount, rate and term, tick "Compare with a second loan offer" and enter the second offer. The table shows the payment, total interest and total paid for each, and the difference. In the example, the longer loan has a payment $113.31 lower but costs $1,378.10 more in interest.
Is a longer loan term cheaper?
It is cheaper each month and more expensive overall. A longer term spreads the same amount over more payments, so the payment falls, but interest is charged for more months. A $40,000 loan at 7.14% costs $4,555.25 in interest over 3 years and $10,941.67 over 7 years.
How much interest will I pay on a $15,000 personal loan?
It depends on the rate and the term. At 11.86%, the Federal Reserve's average for 24-month bank personal loans in the second quarter of 2026, a $15,000 loan over 2 years costs $1,922.92 in interest. Stretching it to 5 years lowers the payment to $332.61 but raises the interest to $4,956.39. Your rate will differ, so enter your own.
Does this include fees, sales tax or insurance?
No. It calculates principal and interest on the amount you enter. Enter the amount you actually borrow, including any fees or taxes you finance. An origination fee taken out of the loan proceeds raises the true cost, which the APR reflects and this calculator's interest-rate input does not.
Can I use this for a student loan?
Yes for the fixed-payment part of repayment: enter the balance at the start of repayment, the interest rate and the term. Income-driven plans, deferment and forbearance change the payments and are not modeled here.
How do I pay off a car loan early?
Add extra principal: a fixed amount each month, a lump sum, or both. On the $40,000 example an extra $100 a month saves $1,039.46 and shortens the loan by 7 months. Check the contract for a prepayment penalty first, and make sure extra money is applied to principal.
Should I enter the interest rate or the APR?
Enter the interest rate on the loan. The APR includes lender fees spread over the term, so it is higher than the rate and is not the number the monthly payment is calculated from. If you only know the APR, the result is a slight overestimate of the payment.
Is what I type sent anywhere?
No. The calculation runs in your browser and the numbers you enter are not sent to a server. We count page visits and button clicks with our own analytics on our own server, and those events carry no amounts or inputs.
Sources
- Board of Governors of the Federal Reserve System, G.19 Consumer Credit, release of September 8, 2026, "Terms of Credit" table, commercial bank interest rates, 2026 Q2: new car loans 60-month 7.14% and 72-month 6.97%, personal loans 24-month 11.86%. The Fed describes these as annual percentage rates that are simple averages of each bank's most common rate in the first week of the middle month of the quarter.
- Microsoft Support: PMT function, IPMT function and PPMT function: arguments, the sign convention, and using the monthly rate and number of months. Google Sheets has the same functions: PMT.
The schedule and every figure in the tables are calculated by this page's own code, which is checked against an independent implementation in the site's test suite. The rates above are the Fed's averages, used as examples; they are not offers.