Loan Calculator

Monthly payment and total interest.

Calculate the monthly payment, total amount paid and total interest for a fixed-rate loan.

How it works

The monthly payment uses the standard amortization formula: P × r / (1 − (1 + r)^−n), where P is the principal, r the monthly interest rate and n the number of monthly payments. Total interest is the total paid minus the principal.

When it helps

Helps compare car loans, personal loans or offers from different lenders before you sign.

Worked example

Borrowing 20,000 at 6% per year over 5 years means a monthly rate of 0.5% and 60 payments. The formula gives a monthly payment of about 386.66. Over five years you pay about 23,200 in total, so the interest costs roughly 3,200.

Stretch the same loan to 7 years and the payment drops to about 292, but total interest rises to roughly 4,540. A lower monthly payment often means a more expensive loan overall.

How amortization works

Each payment covers that month's interest first, and the rest reduces the balance. Early on, interest takes a large share of each payment; as the balance shrinks, more of every payment goes toward the principal.

That's why extra payments early in a loan save the most interest. Check with your lender whether early repayment is allowed and whether there's a fee. When comparing offers, look at the APR, which includes many fees, rather than the headline interest rate alone.

Frequently asked questions

Does it include fees?

No. Origination fees, insurance and taxes aren't included, so the real cost may be higher.

Why does a longer term cost more?

Lower monthly payments mean interest accrues for longer on a larger balance.

What if the interest rate is 0%?

Then the payment is simply the loan amount divided by the number of months, and total interest is zero.

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