Loan Calculator
Work out the monthly payment on a fixed-rate loan, plus how much you repay in total and how much of that is interest. Works for car finance, personal loans, student debt, and mortgages.
How to Use
- Enter the amount you are borrowing — the principal, after any deposit or trade-in.
- Enter the annual interest rate as a percentage. Use the nominal rate your lender quotes, not the APR, if the two differ.
- Enter the term and pick whether that number is in years or months.
- Read the monthly payment, the total you will repay over the life of the loan, and the interest portion. The bar shows how much of every repayment is interest rather than principal.
Features
- Standard amortization formula, the same one lenders use for level repayments
- Correct handling of 0% interest deals — the payment becomes a straight division
- Term entered in either years or months
- Visual split of principal versus interest across the whole loan
- One-click copy of the full summary for pasting into a spreadsheet or message
How Loan Repayments Actually Work
A fixed-rate loan is repaid on an amortization schedule, which means every payment is the same size but its composition changes over time. The formula behind that is P·r(1+r)ⁿ ÷ ((1+r)ⁿ − 1), where P is the amount borrowed, r is the monthly interest rate — the annual rate divided by twelve and by a hundred — and n is the total number of monthly payments. Multiply the monthly payment by n and you get everything you will hand over; subtract the principal from that and what remains is the interest.
The consequence that surprises borrowers is front-loading. Interest each month is charged on the balance still outstanding, and the balance is highest at the start, so your early payments are mostly interest with only a sliver going to the debt itself. On a twenty-five year mortgage it is entirely normal for the first year's payments to be over two-thirds interest. That is why overpaying early has such a disproportionate effect: every extra unit of principal you knock off at the beginning removes interest from every remaining month of the schedule. It is also why refinancing late in a term rarely saves what people expect — by then you were already paying mostly principal.
Term length is the other lever, and it works in the opposite direction to intuition about affordability. Stretching a loan from three years to six roughly halves the monthly payment but can easily double the interest, because you are renting the money for twice as long. When you compare two offers, compare the total repaid figure rather than the monthly one. Finally, remember what this calculator does not include: arrangement or origination fees, payment protection insurance, property taxes and home insurance on a mortgage, and any early-settlement penalty. Those are exactly the items that make a lender's APR higher than the headline rate, so use this to compare and orient yourself, then confirm the real figures with the lender before signing.
Frequently Asked Questions
Does this work for a 0% interest deal?
Yes. The amortization formula divides by zero at a 0% rate, so the calculator detects that case and simply divides the amount borrowed by the number of months. Total interest correctly shows as zero.
What is the difference between the interest rate and the APR?
The nominal interest rate is the cost of borrowing the money. The APR bundles in mandatory fees and expresses the whole cost as a yearly rate, so it is usually higher. Enter the nominal rate here for the payment figure, and use the APR when comparing offers from different lenders.
Can I use this for a mortgage?
For the principal-and-interest portion, yes — that is the same amortization maths. Your actual monthly outgoing will be higher because most mortgage payments also include property tax, buildings insurance, and sometimes mortgage insurance, none of which this tool models.
Why is my lender's payment a few cents different?
Lenders round each monthly instalment to the nearest cent and often adjust the final payment to clear the balance exactly. Some also use daily rather than monthly interest accrual. Differences of a few cents per month are normal and do not indicate an error.
Which currency does it use?
None. The calculator works on plain numbers, so the output is in whatever currency you entered. There is no exchange rate applied anywhere.