Term Loan Repayment Schedule Calculator and Formula

A term loan repayment schedule calculator estimates the fixed monthly payment and total interest for a loan repaid over a set term. Enter the loan amount, annual interest rate (APR), and term in years; the results use equal monthly payments and show how much interest those rounded payments add up to.

Formula

The calculator uses the standard fixed-payment amortizing loan formula. It divides the principal and interest cost across equal monthly installments, with each payment covering interest due for that month and reducing principal by the remainder.

• Monthly payment: M = P × r / [1 − (1 + r)⁻ⁿ]
• Total interest: I = M × n − P

Here, P is the loan principal in dollars, APR is the annual percentage rate entered as a percent, r is the monthly rate as a decimal (APR ÷ 1,200), n is the number of monthly payments (loan term in years × 12), M is the monthly payment in dollars, and I is total interest in dollars. The displayed monthly payment is rounded to cents. Total interest is calculated from that displayed, rounded payment multiplied by the number of payments, then less the original principal.

Worked Example

Using the calculator’s defaults: principal P = $20,000, APR = 8%, and term = 5 years.

1. Convert APR to a monthly decimal rate: r = 8 ÷ 1,200 = 0.0066667.
2. Find the number of payments: n = 5 × 12 = 60.
3. Substitute into the payment formula: M = 20,000 × 0.0066667 ÷ [1 − (1.0066667)⁻⁶⁰] ≈ $405.53 per month, rounded to cents.
4. Calculate total interest using the rounded payment: I = $405.53 × 60 − $20,000 = $4,331.80.

The estimated result is a monthly payment of $405.53 and total interest of $4,331.80. Actual schedules can differ if the lender uses different rounding, payment dates, or loan terms.

Assumptions

• The interest rate is fixed for the full term.
• Payments are equal monthly installments, made at the end of each monthly period.
• Interest compounds monthly using APR divided by 12.
• The estimate excludes fees, taxes, insurance, PMI, and escrow; none of these are calculator inputs.

How a Term Loan Repayment Schedule Works

A term loan is borrowed for a defined period and repaid according to agreed payment terms. In a typical fully amortizing schedule, the payment amount stays level while its composition changes. Early payments generally include a larger interest portion because interest is calculated on a higher outstanding balance. As principal falls, the interest portion usually declines and more of each payment goes toward principal.

A repayment schedule, also called an amortization schedule, lays out each payment period: starting balance, payment, interest charged, principal repaid, and ending balance. This calculator gives a payment and total-interest estimate, not a row-by-row schedule. For an individual month, a basic monthly calculation is interest = starting balance × monthly rate; principal repaid = payment − interest; ending balance = starting balance − principal repaid. Actual lender schedules may apply daily interest or other contractual details instead.

When to Use the Calculator and How to Read It

Use the estimate to understand the arithmetic of a proposed fixed-rate term loan, compare hypothetical amounts or terms, or check how the stated APR and term affect payment size. Enter the amount actually financed, not necessarily the purchase price: financed charges may change principal, while fees paid separately are not represented here. Use the APR supplied for the loan as an input, rather than treating the example default as a quote.

• Monthly payment is the modeled amount due each month for principal and interest only.
• Total interest is the modeled interest paid over all scheduled payments; it is not the total of all payments.
• Total scheduled payments can be found by multiplying the displayed monthly payment by the number of months. In the example, that is $24,331.80.

The calculator does not assess whether a payment fits a household budget, whether a borrower qualifies, or whether the loan terms are suitable. Those questions involve information beyond this formula.

Choosing Inputs and Understanding Limits

Use the principal, APR, and term from the same loan offer or scenario. A longer term usually produces a smaller required payment under this formula but more scheduled payments; total interest depends on both the payment and duration. A shorter term has fewer payments, and the monthly payment is generally higher for the same principal and rate. These are mathematical effects, not a recommendation about which term to select.

The APR field accepts values from 0.01% to 100% because the payment expression divides by the monthly rate. A true zero-interest loan needs a different calculation: payment would be principal divided by the number of payments, and total interest would be zero. Do not enter zero here. The term is entered in years, so 5 means 60 monthly payments, not five payments.

The formula assumes a constant rate and level payments from the start. It does not model variable rates, an initial interest-only period, a balloon payment, irregular payment intervals, skipped or late payments, or additional principal payments. Extra payments can change both payoff timing and interest, so a separate calculation with payment-date details is needed to estimate those effects.

Common Calculation Mistakes

• Mixing percent and decimal rates: enter 8 for 8% APR, not 0.08; the formula converts the percentage to a monthly decimal.
• Using the wrong term unit: the input is years. Multiplying by 12 is already built into the calculation.
• Confusing interest with total repayment: total interest excludes the original principal; adding principal to interest gives total scheduled payments.
• Rounding too early: the displayed payment is rounded to cents, and the total-interest output uses that rounded payment. A lender may calculate individual periods with its own rounding conventions.
• Assuming APR captures every cash cost: this calculator uses APR as the rate in a monthly-interest formula and does not separately model fees or other charges.

Frequently Asked Questions

How do I calculate a term loan monthly payment?
Convert annual APR to a monthly decimal by dividing by 1,200, convert the term to months, then use M = P × r / [1 − (1 + r)⁻ⁿ]. This calculator performs those steps and rounds the payment to cents.

Does the calculator show a full repayment schedule?
No. It estimates the monthly payment and total interest. A full schedule requires calculating the interest and remaining principal for each payment period using the lender’s precise timing and rounding rules.

Why does a longer loan term change total interest?
With the same principal and rate, a longer term spreads repayment over more months. The payment is generally lower, but interest accrues across more periods, so scheduled total interest is generally higher.

Can I use this for a variable-rate loan?
Only as a snapshot using one assumed APR. A rate change can alter later payments or the payoff schedule, and this calculator does not model rate resets.

Why might my lender’s payment differ?
The lender may use a different balance, rate convention, payment date, day-count method, rounding approach, or additional loan charges. Check the loan disclosure for the figures and schedule that apply to the loan.

This result is an estimate, and the lender’s disclosure gives the exact figures.

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in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2