Simple Loan Calculator
Free loan calculator to estimate your monthly payment, total interest, and total amount. Enter loan amount, interest rate, and term to see your repayment breakdown.
The formula behind the number
Every fixed-rate instalment loan uses the same amortization formula. The payment is whatever amount, repeated n times, exactly clears the balance and the interest accrued along the way:
M = P × r(1 + r)n ÷ [(1 + r)n − 1]M = monthly payment · P = principal · r = monthly rate (annual ÷ 12) · n = number of months
The one place people go wrong by hand is r. It is the annual rate divided by twelve, not the annual rate — and n is months, not years. A 7% loan over 5 years means r = 0.005833 and n = 60.
Why your early payments barely touch the balance
The payment stays flat, but its split does not. Interest is charged on the balance outstanding, so it is largest at the start and shrinks every month. Here is a $30,000 loan at 7% over 5 years — a $594.04 monthly payment throughout:
| Payment | To interest | To principal | Balance left | % wasted |
|---|---|---|---|---|
| #1 | $175.00 | $419.04 | $29,580.96 | 29.5% |
| #12 | $147.31 | $446.72 | $24,807.06 | 24.8% |
| #30 | $98.01 | $496.03 | $16,305.38 | 16.5% |
| #48 | $43.26 | $550.78 | $6,865.34 | 7.3% |
| #60 | $3.45 | $590.59 | $0.00 | 0.6% |
Payment one sends 29.5% to the lender; payment sixty sends 0.6%. This is also why paying a loan off early saves more than people expect, and why it saves the most when you do it early — you are skipping the expensive payments, not the cheap ones.
Interest rate is not APR
The calculator takes an interest rate. Lenders advertise an APR, which folds in origination fees, broker fees and points and re-expresses the total as a yearly percentage. APR is the number to compare offers with; interest rate is the number that generates your payment.
When they differ, fees are the reason. A 6.5% loan with 2 points has an APR near 6.9% — the payment matches 6.5%, but you are down the fee either way. Two offers with identical rates and different APRs are not the same offer.
One caveat on comparisons: APR assumes you hold the loan to term. Pay it off in year three of a thirty-year mortgage and the upfront fees are spread over far fewer months, so the effective cost lands well above the quoted APR.
Which lever actually saves money
Same $30,000 loan, changing one thing at a time. The comparison is worth running before you negotiate, because the levers are not equally powerful:
Rate (5 years)
Two points of rate cost ~$3,400 over the loan. Worth shopping.
Term (at 7%)
A lower payment here is not a discount — it is more interest.
Extra payments
Clears in 4.2 years instead of 5 and saves $972, no renegotiation.
Note what the middle column shows: stretching 5 years to 7 drops the payment by $141 but adds $2,392 in interest. A longer term is not cheaper — it is the same debt, rented for longer. Extra payments run the other way, and they work without renegotiating anything.
What this calculator deliberately leaves out
This is a clean amortization model. Real quotes carry costs it does not know about, so treat its output as the floor rather than the total:
- Origination and closing fees — often 1–8% of principal, sometimes deducted from what you receive rather than added to what you owe.
- Escrow on a mortgage — property tax and homeowners insurance usually ride along with the payment and can rival the interest.
- Mortgage insurance — typically required below 20% equity.
- Prepayment penalties — some loans charge for early payoff, which flips the maths on extra payments entirely. Check before you commit to overpaying.
- Variable rates — this model assumes the rate never moves. For an ARM it is only accurate through the fixed period.
Ask for the amortization schedule
Any lender can produce a month-by-month schedule before you sign. If the monthly payment on it does not match what this calculator gives for the same principal, rate and term, something is in there that was not discussed — that is the question worth asking.