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Loan Calculator
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About the Loan Calculator
Work out the monthly payment, total interest and total cost of a fixed-rate loan before you sign. Adjust the amount, rate or term to see how each change affects what you pay.
How to use the Loan Calculator
- Enter the Principal ($), the amount you want to borrow.
- Enter the Annual APR (%) and the Duration (Years).
- Add any Processing Fees ($) the lender charges.
- Press Calculate to see your monthly payment, total interest and total repayment.
Formula and method
Payment = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
where P is the loan amount, r is the monthly interest rate (APR ÷ 12) and n is the number of monthly payments.
Worked example
Borrowing $10,000 at 8% for 3 years: r = 0.08 ÷ 12 = 0.006667 and n = 36. The payment is about $313.36 a month, so you repay $11,281 in total and pay roughly $1,281 in interest.
When to use the Loan Calculator
- Finding the monthly payment on a personal, business or education loan before you apply.
- Comparing loan offers with different rates and terms side by side.
- Checking how much total interest you would pay over the full term.
- Deciding whether you can afford to borrow a certain amount.
Common mistakes to avoid
- Comparing loans only by the monthly payment. A lower payment from a longer term can hide a much higher total cost.
- Ignoring fees. Origination fees and insurance add to the true cost, so compare the APR, not just the interest rate.
- Borrowing the maximum you qualify for instead of the amount you actually need.
Tips
- A longer term lowers the monthly payment but raises the total interest.
- Compare offers using APR, which includes fees, not just the headline interest rate.
- Check whether your loan has early-repayment penalties before paying extra.
Frequently Asked Questions
The interest rate is the cost of borrowing the money. APR also includes fees, so it is a better measure of the true yearly cost.
Yes. Extra payments reduce the balance sooner, so less interest builds up over the life of the loan.
The interest rate is the cost of borrowing the money. The APR also includes most fees, so it gives a fuller picture of the yearly cost and is better for comparing offers.
Usually yes, because interest is charged on the outstanding balance. Check first whether your lender charges a prepayment penalty.