🏦 Loan Calculator

The Loan Calculator turns a loan amount, annual interest rate and term into a fixed monthly payment, the total interest you will pay, and the total cost of the loan. It uses the standard amortisation formula that banks use for fixed-rate loans, so the monthly figure matches a typical repayment schedule.

How to Use This Tool

Enter the loan amount, the annual interest rate as a percentage, and the term in years. The tool calculates the monthly payment, total interest over the life of the loan, and the total amount repaid.

What This Tool Checks

The amortising payment formula: M = P·r·(1+r)^n ÷ ((1+r)^n − 1), where r is the monthly rate (annual ÷ 12) and n is the number of monthly payments. When the rate is zero it falls back to amount ÷ months.

Understanding Your Results

The monthly payment is fixed for the whole term. Total interest shows how much the borrowing costs you on top of the principal — often a surprisingly large number on long terms. Total cost is principal plus interest.

How to Fix Common Problems

If the payment looks too low, check the rate is entered as an annual percentage (7.5, not 0.075 and not the monthly rate). A longer term lowers the monthly payment but raises total interest — that trade-off is the whole point of the tool.

SEO Best Practices

Compare loans by total cost, not just monthly payment — a lower monthly payment over a longer term usually costs far more overall. Remember this simple model excludes arrangement fees, insurance, and variable-rate changes, so treat real offers' APR as the authoritative figure.

Example

A $20,000 loan at 7.5% over 5 years is about $400.76 per month, roughly $4,046 in total interest, and about $24,046 repaid overall. Stretching it to 7 years lowers the monthly payment but increases total interest.

Common Mistakes to Avoid

Choosing a loan on monthly payment alone hides the true cost. Entering a monthly rate where an annual rate is expected massively understates the payment.