LOAN PAYMENT GUIDE
How loan payment calculations work
An amortized loan payment is designed to pay both interest and principal over a fixed number of payment periods.FORMULA
payment = principal × periodic rate ÷ (1 − (1 + periodic rate)⁻number of payments)WORKED EXAMPLE
A calculator converts annual rate into a periodic rate, calculates the number of scheduled payments, then estimates one consistent payment amount.STEP BY STEP
Choose payment frequency
Monthly, bi-weekly, and weekly schedules use a different number of payments per year.
Convert annual rate to periodic rate
Divide the annual rate by the number of payment periods in a year.
Read payment, total repaid, and interest
The payment estimate excludes lender-specific charges, taxes, insurance, and fee policies.