Monthly payment on a $30,000 car loan at 6.5% for 6 years
A $30,000 loan at 6.5% over 6 years costs $504.30 a month. You pay $6,309 in interest, $36,309 in total.
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The numbers for these inputs
| Year | Principal paid | Interest paid | Balance left |
|---|---|---|---|
| 1 | $4,226 | $1,826 | $25,774 |
| 2 | $4,509 | $1,543 | $21,265 |
| 3 | $4,811 | $1,241 | $16,454 |
| 4 | $5,133 | $918 | $11,321 |
| 5 | $5,477 | $575 | $5,844 |
| 6 | $5,844 | $208 | $0 |
How it works
A fixed-rate loan is repaid with the same payment every month. The payment is chosen so that, after the last one, the balance is exactly zero: payment = amount x r / (1 - (1 + r)^-n), where r is the monthly rate (yearly rate / 12) and n is the number of months.
Each month the interest is the balance times r. The rest of the payment reduces the balance. Early on most of the payment is interest; later most of it is principal, which the year-by-year table shows.
The result does not include fees, insurance, taxes or a variable rate. Your lender's figure can differ a little, so use this to compare options, then ask for the official schedule.
Common mistakes
- Comparing loans by monthly payment alone: a longer term lowers the payment but raises the total interest.
- Forgetting that the quoted rate and the APR can differ once fees are included.
- Not checking whether extra payments go to principal; paying a little extra early saves the most interest.
- Using the headline rate for a variable-rate loan, which can rise.
Questions
What is the monthly payment on $30,000 at 6.5%?
$504.30 a month for 72 months, assuming a fixed rate and equal payments.
How much interest will I pay in total?
$6,309, which is 21.03% of the amount borrowed. The total repaid is $36,309.
How do I pay less interest?
Choose a shorter term, make a larger down payment, or pay extra toward the principal. Change the term slider to see the trade-off between payment and total interest.
Does this include fees or insurance?
No. It covers principal and interest only. Add origination fees, insurance or property taxes separately; for a mortgage they can add a large share to the monthly cost.
Why is the first year mostly interest?
Interest is charged on the remaining balance, which is highest at the start. As the balance falls, a larger part of each equal payment goes to principal.
More loan payment examples
- Monthly payment on a $20,000 car loan at 7% for 5 years
- Monthly payment on a $10,000 personal loan at 9% for 3 years
- Monthly payment on a $5,000 personal loan at 12% for 2 years
- Monthly payment on a $30,000 student loan at 5% for 10 years
- Monthly payment on a $50,000 student loan at 5.5% for 10 years
- Monthly payment on a $300,000 mortgage at 6.5% for 30 years
- Monthly payment on a $300,000 mortgage at 6% for 15 years
- Monthly payment on a $400,000 mortgage at 6.75% for 30 years
- Monthly payment on a $200,000 mortgage at 7% for 30 years