A fixed-rate loan spreads a lump sum plus interest into equal monthly payments. Understanding how the rate and term drive that payment helps you compare offers and see the true cost of borrowing.
What sets your monthly payment
Three inputs determine a fixed payment: the amount borrowed, the annual interest rate, and the term. A longer term lowers the monthly payment but increases the total interest you pay, because the balance is outstanding for longer.
The calculator uses the standard amortization formula, the same math a bank uses, so the monthly figure you see matches a typical loan statement.
The cost of a longer term
Stretching a loan from three years to six roughly halves the monthly payment, which feels like relief — but total interest can more than double. Adjust the term above and watch the total interest figure to see the trade-off directly.