Loan Repayment Calculator

Intro

Use this loan repayment calculator to estimate monthly repayments, total repaid, and interest cost for a fixed-rate loan. Enter the amount borrowed, annual interest rate, and repayment term to compare personal, auto, or other installment loans.

What this loan calculator does

The calculator shows the estimated monthly payment for a loan with equal monthly repayments. It also helps you understand how much interest may be paid across the full term.

It is useful for questions such as:

• What monthly payment would a loan create?
• How much interest could I pay over the term?
• How does a shorter or longer term change the payment?
• What happens if the interest rate changes?

How it works

The tool uses a repayment formula for a loan with equal payments at the end of each month:

Monthly payment = P × r / (1 - (1 + r)^(-n))

P is the amount borrowed, r is the entered annual percentage divided by 100 and then by 12, and n is the term in years multiplied by 12. At zero interest, the payment is simply P / n.

Interest is calculated on the outstanding balance. The rest of each payment reduces that balance, so the interest share falls over time. The CFPB’s explanation of amortization describes this repayment pattern. This calculator models the entered interest rate; it does not calculate a fee-inclusive APR.

Example calculation

The worked examples on this page use US dollars (USD). Choosing UK - GBP changes the calculator's currency labels; it does not convert your entries or these examples.

Enter $15,000, 7% annual interest and 5 years. There are 5 × 12 = 60 monthly payments, and the monthly rate is 0.07 / 12.

Payment = 15,000 × (0.07 / 12) / (1 - (1 + 0.07 / 12)^(-60)) = $297.02 per month

For the first payment, interest is 15,000 × 0.07 / 12 = $87.50. Approximately $209.52 reduces the principal, leaving $14,790.48.

The unrounded monthly payment is about $297.017978. The calculator uses that value for the total and rounds only the display, so multiplying the displayed $297.02 by 60 gives a slightly different total. A lender may round installments and adjust the final payment differently.

With the same loan and term but 0% interest, $15,000 / 60 gives $250.00 per month and $0.00 interest.

How to use the result

Use the monthly payment to check affordability, then look at total interest to understand the cost of borrowing. A lower monthly payment is not always cheaper if it comes from stretching the loan over more years.

If you are comparing a home loan, use the Mortgage Calculator. If you are comparing saving instead of borrowing, use the Compound Interest Calculator.

Assumptions and limitations

• The rate stays fixed for the entire term, with equal monthly payments and no missed payments, overpayments, payment holidays or final balloon payment.
• The model divides the entered annual percentage by 12. It does not reproduce daily interest, irregular payment dates or every lender’s APR convention.
• Arrangement fees, late fees, insurance, taxes and early repayment charges are excluded. Include a fee in the borrowed amount only if it is actually financed at the same rate; fees paid separately remain separate costs.
• Totals use the unrounded monthly payment. Real installment and interest rounding can change the final few cents.
• The loan amount and term must be positive and the rate cannot be negative. Use a term corresponding to a whole number of monthly payments.
• This is an educational estimate, not a lender quote, loan approval or financial advice.

How we explain formulas, assumptions and sources