How Loan Payments Are Calculated
Monthly payments use the amortization formula: M = P[r(1+r)^n]/[(1+r)^n-1], where P is principal, r is monthly interest rate, and n is total payments. This ensures equal monthly payments over the loan life.
Understanding Your Loan
Early payments are mostly interest, while later payments pay down more principal. This calculator shows monthly payment, total interest, and full loan cost to help compare offers.