Loan Repayment Calculator
This free loan repayment calculator estimates the fixed monthly payment for a personal loan, car loan, student loan or fixed-rate mortgage, together with the total interest and the total amount you will pay back. Enter the amount, the annual interest rate and the term in years to compare offers before you sign anything.
How to use the loan repayment calculator
- Enter the loan amount (the principal you borrow).
- Enter the annual interest rate offered by the lender, for example 6.5.
- Enter the loan term in years.
- Press Calculate Repayment to see the monthly payment, total interest and total repaid.
The loan payment formula
Fixed-rate loans are usually amortizing: every month you pay the same amount, which covers that month’s interest plus part of the principal. The payment is calculated with the standard formula used by banks:
M = P × r × (1 + r)n ÷ ((1 + r)n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly payments (years × 12).
Worked example
Borrowing $10,000 at 6% for 5 years gives a monthly payment of $193.33. Over 60 payments you repay $11,599.80, so the loan costs $1,599.80 in interest. In the first month, $50.00 of the payment is interest (0.5% of $10,000) and $143.33 reduces the balance. As the balance falls, the interest part shrinks and more of each payment goes to the principal.
How the loan term changes the cost
| Term | Monthly payment | Total interest |
|---|---|---|
| 3 years | $304.22 | $951.92 |
| 5 years | $193.33 | $1,599.80 |
| 7 years | $146.09 | $2,271.56 |
All three rows are a $10,000 loan at 6%. A longer term lowers the monthly payment but makes the loan more expensive overall. Choose the shortest term whose payment fits comfortably in your budget.
How the interest rate changes the cost
| Rate (5 years, $20,000) | Monthly payment | Total interest |
|---|---|---|
| 4% | $368.33 | $2,099.80 |
| 8% | $405.53 | $4,331.80 |
| 12% | $444.89 | $6,693.40 |
Doubling the rate more than doubles the interest paid. Even half a percentage point matters on large or long loans, so it is worth comparing several lenders.
Tips before taking a loan
- Compare the APR (annual percentage rate), not only the nominal rate, because APR includes fees.
- Check for origination fees, insurance and early repayment penalties; they are not included in this calculator.
- Keep the monthly payment under a safe share of your income. Many lenders look for total debt payments below about a third of take-home pay.
- Extra payments toward the principal shorten the loan and reduce interest, if the contract allows them.
- Variable-rate loans can change over time; this calculator assumes the rate stays fixed.
Frequently asked questions about the loan repayment calculator
What loans does this calculator work for?
Any fixed-rate loan repaid in equal monthly installments: personal loans, car loans, student loans and fixed-rate mortgages.
Does the monthly payment include taxes and insurance?
No. Mortgage payments often include property tax and insurance; add those separately.
What happens with a 0% interest rate?
The calculator divides the amount evenly over the months, so a $12,000 loan over 2 years at 0% is $500 per month.
Why is most of my early payment interest?
Interest is charged on the outstanding balance, which is highest at the start. Each payment reduces the balance, so the interest share falls over time.
Is the result exactly what my bank will charge?
It is very close for a standard fixed-rate loan. Banks may round differently or add fees, so use the lender’s official figures before signing.
Related tools
- Compound Interest Calculator – the other side of interest: how savings grow.
- Salary After Tax Calculator – check how much of your income a payment takes.
- Guide: how loan payments and amortization work
- All free tools
Further reading: Amortization calculator on Wikipedia. This calculator is for estimates only and is not financial advice.