This tool serves two purposes depending on what you select. In Loan Payment mode, it calculates your fixed monthly payment for any loan — personal loans, auto loans, student loans, or any other fixed-rate installment debt. In Future Savings mode, it estimates how much a lump sum will grow over time with compound interest.
For loan calculations, the standard amortization formula is used: M = P × r(1+r)^n / ((1+r)^n − 1), where P is the principal, r is the monthly interest rate, and n is the number of monthly payments.
For savings growth, the future value formula is used: FV = P × (1 + r)^n, where P is your initial deposit, r is the monthly interest rate, and n is the number of months.
Say you're taking out a $15,000 personal loan at 8% annual interest over 48 months. The monthly rate is 8% ÷ 12 = 0.667%. Using the amortization formula, your monthly payment would be approximately $366.19. Over 48 months, you'd repay a total of $17,577 — meaning roughly $2,577 in interest on top of the original $15,000.
Suppose you deposit $5,000 into a high-yield savings account earning 4.5% annual interest and leave it untouched for 36 months. The monthly rate is 4.5% ÷ 12 = 0.375%. After 3 years, your balance would grow to approximately $5,716 — a gain of $716 purely from compound interest, with no additional contributions.
Yes. Use the dropdown to switch between modes. "Loan Payment" calculates a fixed monthly payment to fully repay a debt over the given term. "Future Savings" calculates how much a one-time lump-sum deposit will grow with compound interest — useful for estimating returns on a CD, savings bond, or high-yield savings account.
Loan and savings terms are most precisely expressed in months since interest compounds monthly. To convert years to months, simply multiply by 12. A 3-year loan is 36 months, a 5-year loan is 60 months, and so on.
No. The loan calculation covers principal and interest only. Real-world loans may also include origination fees, prepayment penalties, or insurance requirements that affect the true cost of borrowing. Always review your lender's full loan disclosure before signing. Similarly, savings estimates assume no taxes on interest earned — actual after-tax returns will be lower depending on your tax bracket.
Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus any accumulated interest — meaning your balance grows faster over time. This calculator uses compound interest for savings, which is how most modern savings accounts and investments work. For loans, amortization spreads payments evenly so that early payments are mostly interest and later payments are mostly principal.
Run each offer through the calculator separately and compare both the monthly payment and the total amount repaid. A lower interest rate always reduces total cost, but a longer term can offset that by adding more months of interest. The best loan is usually the one with the lowest total repayment amount that still has a monthly payment you can comfortably afford.
You can get a rough estimate, but our dedicated Mortgage Calculator is better suited for home loans as it uses years instead of months for the term, which is more intuitive for 15- and 30-year mortgages.