Work out the monthly payment, total interest and total cost of any amortizing loan.
Work out the monthly payment, total interest and total cost of any amortizing loan.
Enter values above and click Calculate — results will appear here with the formula explained.
Most installment loans use amortization: every month you pay interest on the remaining balance plus some principal. Early payments are mostly interest; later ones are mostly principal. The formula above produces the fixed monthly payment that exactly pays the loan off over its term.
The total cost of a loan is driven by three levers — amount, rate and length. Doubling the term roughly doubles total interest even though the monthly payment falls, which is why shorter terms are cheaper overall whenever the payment is affordable.
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Most installment loans use amortization: every month you pay interest on the remaining balance plus some principal. Early payments are mostly interest; later ones are mostly principal. The formula above produces the fixed monthly payment that exactly pays the loan off over its term. Formula: M = P · r(1+r)ⁿ ÷ ((1+r)ⁿ − 1), where r is the monthly rate (APR ÷ 12) and n is months
Loan Calculator computes work out the monthly payment, total interest and total cost of any amortizing loan. Formula: M = P · r(1+r)ⁿ ÷ ((1+r)ⁿ − 1), where r is the monthly rate (APR ÷ 12) and n is months. Example: Borrowing $20,000 at 7.
Work out the monthly payment, total interest and total cost of any amortizing loan. Formula: M = P · r(1+r)ⁿ ÷ ((1+r)ⁿ − 1), where r is the monthly rate (APR ÷ 12) and n is months
| Field | What to enter |
|---|---|
| Loan amount ($) | e.g. 20000 |
| Annual interest rate (%) | e.g. 7.5 |
| Term (years) | e.g. 5 |
All fields use the exact formulas shown below — results include step-by-step breakdowns you can verify by hand.
Most installment loans use amortization: every month you pay interest on the remaining balance plus some principal. Early payments are mostly interest; later ones are mostly principal. The formula above produces the fixed monthly payment that exactly pays the loan off over its term.
The total cost of a loan is driven by three levers — amount, rate and length. Doubling the term roughly doubles total interest even though the monthly payment falls, which is why shorter terms are cheaper overall whenever the payment is affordable.
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Borrowing $20,000 at 7.5% APR for 5 years: the monthly rate is 0.625% over 60 payments, giving $400.76 per month, $4,045.51 in total interest and $24,045.51 repaid overall.
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