Loan payment calculator
See what a loan really costs. Enter the amount, the yearly interest rate and the term, and get the monthly payment, the total interest and a year-by-year breakdown.
How the loan payment calculator works
Most personal, car and student loans are repaid in equal monthly instalments. Each payment is part interest and part repayment of the amount you borrowed. In the early months most of the payment is interest, because the balance is at its highest. As the balance falls, more of each payment goes to principal.
The table shows this shift year by year, which is why paying a little extra early on saves more than paying extra near the end.
The formula behind it
Payment = P × r × (1 + r)n ÷ ((1 + r)n - 1)
P is the amount borrowed, r is the monthly rate (annual rate ÷ 12) and n is the number of monthly payments.
A worked example
Borrow $20,000 at 6% for 5 years. That is 60 payments at 0.5% a month. The payment works out to $386.66. Over 60 months you repay $23,199.36, so the loan costs $3,199.36 in interest.
Questions people ask
Is the rate I enter APR or the plain interest rate?
Enter the annual rate your lender quotes. APR also includes some fees, so it can be a bit higher than the plain rate. Using the APR is a cautious choice for comparing offers.
Why does a longer term cost more in total?
The payment is smaller, but you owe interest for more months. Stretching a loan from 5 to 7 years lowers the monthly figure and raises the total interest.
Does paying extra help?
Yes. Extra payments go straight to principal, which cuts the interest charged on every later month. Check your lender allows this without a fee.
Does it work for a mortgage?
The maths is the same for a fixed-rate mortgage, but taxes, insurance and fees are not included, so the real monthly cost will be higher.