How to use the loan calculator
Type the amount you want to borrow, the annual interest rate and the repayment term. You can split the term into years and extra months – for example 3 years and 6 months for a 42-month loan. The result updates as you type and shows the monthly payment, the number of payments, the total interest and the total you will hand back to the lender. Below the result you'll find a year-by-year amortization table with the interest and principal paid each year and the balance that remains.
The formula behind it
Most consumer and business installment loans are fully amortizing: every payment is the same size and the last one brings the balance to zero. The payment is found with the annuity formula:
Here P is the principal, r the periodic (monthly) rate and n the number of payments. With a 0% rate the formula simplifies to P ÷ n. Total interest is simply the sum of all payments minus the amount borrowed.
APR versus interest rate
The interest rate is the price of borrowing the money. The APR also folds in certain upfront fees, such as origination charges, spread over the life of the loan. If you want to compare offers fairly, enter each lender's APR rather than the headline rate. If a fee is deducted from the money you receive, the true cost is higher than the rate suggests.
Ways to pay less interest
- Choose the shortest term you can comfortably afford – the monthly payment rises, but the total interest falls sharply.
- Improve your credit score before applying; even a couple of percentage points makes a big difference.
- Check whether the lender allows extra payments without penalty, and put windfalls toward principal.
- Compare at least three offers using the same term so the numbers are directly comparable.
This loan calculator assumes a fixed rate and monthly payments. Variable-rate loans or interest-only periods will produce different figures.
Frequently asked questions
How is the monthly loan payment calculated?
It uses the standard amortization formula, which spreads principal and interest evenly over all payments so the balance reaches zero exactly at the end of the term.
Does a longer term save money?
No. A longer term lowers the monthly payment but increases the total interest you pay because the balance stays outstanding longer.
Can I enter a 0% loan?
Yes. With a 0% rate the payment is simply the loan amount divided by the number of months, and total interest is zero.
Is this suitable for credit cards?
Not exactly. Credit cards have revolving balances and minimum payments that change each month. Use this tool if you want to know the fixed payment that would clear a balance in a set time.
Last reviewed 2026-10-27. This loan calculator is provided for general information; verify important decisions with a qualified professional.