Interest Rate Calculator: Find the Rate From Loan Amount & Payment
Find the interest rate on a loan when you know the amount, the term and the monthly payment. This is useful for checking a loan offer, a car dealer quote, or an old mortgage. Example: a $200,000 loan over 30 years with a $1,264.14 monthly payment has an interest rate of 6.5%.
Show steps
How to use the Interest Rate Calculator
- Enter the loan amount and the term in years.
- Enter the monthly payment (principal and interest only).
- Press Calculate to see the annual interest rate and the total interest you would pay.
Formula and method
M = P × r / (1 − (1 + r)−n)
M is the monthly payment, P the loan amount, r the monthly rate and n the number of payments. The equation cannot be rearranged to isolate r, so the calculator solves it numerically. Check: $200,000, 30 years, 6.5% gives M = $1,264.14.
Frequently asked questions
Does the monthly payment include taxes and insurance?
Use only principal and interest. Escrow for property tax and insurance would make the rate look higher than it is.
Is this the APR?
It is the nominal interest rate implied by the payment. APR also includes fees, which the APR calculator handles.
Why do I get an error?
If total payments are less than the loan amount, there is no positive interest rate that fits. Recheck the payment and term.
Sources
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