How is the loan term calculated?

The loan term is calculated using the formula: n = log(PMT/(PMT-P×r)) / log(1+r), where PMT is your monthly payment, P is the principal, and r is the monthly interest rate. This tells you how many months until the loan is paid off.

What if my payment is too low?

If your monthly payment is less than or equal to the monthly interest charge (P × r), you'll never pay off the loan—the balance will actually grow! The calculator will warn you if this happens.

How can I shorten my loan term?

Increase your monthly payment. Even small increases can make a big difference. For example, adding $100/month to a mortgage payment can shorten a 30-year loan by 5+ years.

What's the minimum payment to pay off a loan?

Your minimum payment must exceed the monthly interest charge. Minimum = Principal × Monthly Rate. Any payment above this will go toward principal and eventually pay off the loan.

Loan Term Calculator

Calculate how long it will take to pay off your loan based on your monthly payment amount. Find out when you'll be debt-free.

Calculator

Result

Loan Amount: $0.00
Interest Rate: -
Monthly Payment: $0.00
Time to Pay Off: -
Total Payments: -
Total Interest: $0.00

Formula & Guide

Formula

n

Loan Term (Months)

n = log(PMT/(PMT-P×r)) / log(1+r)

Solve for number of payments

Formula Variables

n

Number of Payments

Months to pay off the loan

PMT

Monthly Payment

Your fixed monthly payment

P

Principal

Loan amount

r

Monthly Rate

Annual rate ÷ 12 (as decimal)

Step-by-Step Scenario

Example: Auto Loan

Loan Amount

$25,000

Interest Rate

6% annually

Monthly Payment

$500

1

Calculate Monthly Rate

r = 6% ÷ 12 = 0.5% = 0.005

2

Apply the Formula

n = log(500/(500-25000×0.005)) / log(1.005)
n = log(500/375) / log(1.005)
n = 58.4 months ≈ 59 months

59 months (4.9 years)

3

Calculate Total Interest

Total Interest = ($500 × 59) - $25,000 = $4,500

Total Interest = $4,500

Additional Examples

Mortgage with Extra Payment

Loan Amount: $300,000

Interest Rate: 5% annually

Payment: $2,000/month

Time to Pay Off

19.5 years

Total Interest

$168,000

Personal Loan

Loan Amount: $15,000

Interest Rate: 8% annually

Payment: $350/month

Time to Pay Off

4.3 years

Total Interest

$3,060

How Loan Term Works

Payment Impact

Higher monthly payments dramatically reduce your loan term. Even a 20% increase can cut years off your payoff time.

Interest Savings

Shorter loan terms mean less total interest paid. Paying off faster saves money over the life of the loan.

Minimum Payment Rule

Your payment must exceed the monthly interest charge. Otherwise, the balance will never decrease.

Plan Your Payoff

Use this calculator to determine the monthly payment needed to pay off your loan by a target date.

Important Notes

Your payment must exceed the monthly interest charge, or the loan will never be paid off.
Increasing your monthly payment by even 10-20% can significantly reduce the loan term and total interest.
Early in the loan, most of your payment goes to interest. Later, more goes to principal.
Use this calculator to plan extra payments and see how they affect your payoff timeline.

Frequently Asked Questions

Common questions about loan term calculation.