Loan Calculator

A loan calculator determines your monthly repayment, total interest paid, and total cost based on the loan amount, interest rate, and term. Understanding these numbers before borrowing prevents costly surprises.

Monthly payment formula: M = P × r(1 + r)ⁿ / ((1 + r)ⁿ − 1)

Where:

• M = monthly payment
• P = loan principal (amount borrowed)
• r = monthly interest rate (annual APR / 12)
• n = total number of monthly payments

Worked examples:

Car loan: Amount: $12,000, APR 6.9%, term 48 months r = 0.069/12 = 0.00575 n = 48 M = $12,000 × 0.00575 × (1.00575)⁴⁸ / ((1.00575)⁴⁸ − 1) M = $286.80/month Total repaid: $286.80 × 48 = $13,766 Total interest: $1,766

Personal loan: Amount: $8,000, APR 8.5%, term 36 months Monthly payment: $252.54 Total interest paid: $1,091

APR vs flat rate: Some lenders advertise a “flat rate”, which looks lower but applies to the original principal for the whole term even as you pay it down. A flat 5% on a 3-year loan works out close to a 10% APR, because on average you only have half the money for half the time. If a lender leads with a flat rate rather than an APR, that is usually why. Always compare APR against APR.

Effect of loan term: Same $10,000 at 7% APR:

Stretching from two years to five cuts the monthly payment by more than half and costs you two and a half times the interest. Lenders quote the monthly figure for exactly that reason.

Early repayment: Most personal loans allow overpayment, and it works better than people expect because every extra dollar goes entirely to principal. An extra $50/month on a $10,000 five-year loan at 7% clears it 13 months early and saves $447 of interest. Do check for early repayment charges first: they are rare on personal loans and common on mortgages.

Currency note: the calculator prints dollar signs, but the arithmetic is currency-neutral. Read $ as whatever you borrow in.