Use the amortization formula M = P x [r(1+r)^n] / [(1+r)^n - 1], where P is the amount borrowed, r is the monthly rate (annual rate divided by 12) and n is the number of monthly payments. As a worked example, 20,000 borrowed over 5 years at an example rate of 7 percent comes to 396.02 per month. A free loan calculator runs the formula instantly for any amount, rate and term.
The formula looks dense but only says one thing: your fixed payment is sized so that after n payments of interest plus principal, the balance hits exactly zero. In the 20,000 example at 7 percent over 60 months, the monthly rate is 0.07 / 12 and the payment lands at 396.02. Over the full term you pay roughly 3,761 in total interest on top of the 20,000 you borrowed.
A smaller loan, a lower rate or a longer term all lower the monthly payment, but a longer term raises the total interest you pay. For comparison, 10,000 over 3 years at an example rate of 6 percent is 304.22 per month. Trying a few scenarios side by side in the calculator is the fastest way to see the trade-off between monthly comfort and total cost.
At the example rate of 7 percent over 5 years, roughly 3,761 in interest is paid over the life of the loan on top of the 20,000 principal.
Yes. Fixed-rate mortgages, car loans and personal loans all use the same amortization formula; only the numbers differ.
Yes. Extra payments reduce the principal early, which shortens the loan and cuts the total interest, since interest accrues on the remaining balance.