Estimate your monthly loan payment, the total interest and the total cost of a loan. Type the amount, the yearly interest rate and the term, and see the result straight away. You can also add an extra monthly payment and see how much time and interest it saves.
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Estimates for a fixed rate loan with equal monthly payments. Fees, insurance and taxes are not included. Calculations happen in your browser.
How the Loan Calculator Works
This calculator uses the standard formula for a fixed rate loan with equal monthly payments. The yearly interest rate is divided by 12 to get a monthly rate. The monthly payment is then worked out so that the loan is paid off exactly at the end of the term. Each payment covers the interest for that month first, and the rest reduces the amount you owe.
The Formula
Monthly payment = P x r / (1 - (1 + r) to the power of minus n), where P is the loan amount, r is the monthly interest rate and n is the number of monthly payments. If the interest rate is 0%, the payment is simply the loan amount divided by the number of months.
Why Early Payments Are Mostly Interest
Interest is charged on the balance you still owe, and the balance is highest at the start. That is why the payment schedule shows a large part of the first payments going to interest, and the share that reduces the loan grows over time. Press Show payment schedule to see every payment.
Paying Extra Each Month
Typing an extra monthly amount puts it straight against the balance. Because you then owe less, you pay less interest each month, the loan ends sooner and the total interest falls. Before you do this, check that your lender does not charge a fee for early repayment.
Tips for Comparing Loans
- Compare the total you will pay, not only the monthly payment. A longer term gives a lower payment but costs more interest.
- Ask whether the quoted rate is a yearly rate, a flat rate or a total cost rate. They are not the same.
- Add fees and insurance to your own budget, because they are not included here.
- This is an estimate. Your lender decides the final terms, so check the figures in your loan offer.
Limits to Know About
- The calculator assumes a fixed rate and equal monthly payments. Variable rate loans, interest only loans and balloon payments work differently.
- Some loans, such as car finance or Islamic financing, may use a different method to work out the cost. Use the figures in your contract.
- Results are estimates for information only and are not financial advice.
Frequently Asked Questions
How is the monthly loan payment calculated?
The yearly rate is divided by 12, and a standard formula spreads the loan and its interest into equal payments over the term. The calculator does this for you.
Can I use it for a car loan or a personal loan?
Yes, as long as the loan has a fixed rate and equal monthly payments. Always check the figures against your lender offer.
What does the extra payment do?
It is added to every monthly payment and goes straight against the balance. This ends the loan sooner and reduces the total interest.
Why is the total I pay more than the loan amount?
The difference is the interest. The longer the term and the higher the rate, the more interest you pay.
Is this calculator free?
Yes. It is free to use, with no sign-up. Your numbers stay in your browser.
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