Loan Calculator
Calculate monthly loan payments and total interest.
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How to Use
- 1Enter loan amount, annual interest rate and term.
- 2View your estimated monthly payment.
- 3Review total interest and total repayment.
Features
- Monthly payment estimate
- Total interest breakdown
- Amortization-based formula
Example
Input
$20,000 at 6% for 5 years
Output
≈ $386.66 / month
Estimate your monthly loan payment, total interest paid and total repayment amount based on loan amount, interest rate and term.
What your monthly payment depends on
Enter the loan amount, the annual interest rate and the term in years, and the calculator shows the fixed monthly payment, the total you will repay and the total interest. It uses the standard amortisation formula that banks use for fixed-rate loans: each monthly payment is the same, but early payments are mostly interest and later payments are mostly principal.
The formula is M = P × r ÷ (1 − (1 + r)^−n), where P is the amount borrowed, r is the monthly rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly payments.
How the term changes the cost
Here is a 20,000 loan at 6% per year over different terms:
| Term | Monthly payment | Total interest |
|---|---|---|
| 3 years | 608.44 | 1,903.79 |
| 5 years | 386.66 | 3,199.36 |
| 7 years | 292.17 | 4,542.37 |
A longer term lowers the monthly payment but more than doubles the interest in this example. If you can afford the higher payment, a shorter term is almost always cheaper.
What this estimate leaves out
- Processing fees, insurance and other charges that lenders add on.
- Variable or floating rates, which change the payment over time.
- Different payment schedules, such as weekly or fortnightly payments.
- Early repayment, which reduces total interest, sometimes subject to a penalty.
To compare offers fairly, ask lenders for the APR (annual percentage rate) or the total amount payable, which include fees. This calculator provides an estimate for planning purposes and is not financial advice.
Paying a little extra each month goes straight to the principal, which cuts the interest charged on every later payment. Even a small overpayment can shorten a loan noticeably.