Loan Calculator
Calculate monthly payments, total interest, and repayment schedule
Enter values above to calculate
How to Use
- Enter the total loan amount in the Loan Amount field.
- Enter the annual interest rate (e.g., 5.5 for 5.5%).
- Select whether the term is in years or months, then enter the duration.
- Click 'Calculate' to see your monthly payment, total interest, and total cost.
- Use results to compare different loan scenarios.
About Loan Calculation
How Monthly Payment is Calculated
The standard loan payment formula is: M = P × r(1+r)^n / ((1+r)^n - 1), where P is principal, r is the monthly interest rate (annual rate / 12), and n is the number of monthly payments. This formula gives you equal (amortizing) payments over the loan term.
Total Interest Cost
Total interest = (Monthly Payment × Number of Months) − Loan Amount. For example, a $200,000 loan at 6% for 30 years has monthly payment of $1,199, total payment of $431,640, and total interest of $231,640 — more than the original loan amount.
Effect of Interest Rate
Even a 1% difference in interest rate significantly affects total cost. On a $200,000 30-year loan: 5% rate costs $186,511 in interest, while 6% costs $231,640 — a difference of $45,129. Getting a lower rate is one of the most powerful ways to reduce loan cost.
Shorter Term vs. Longer Term
A shorter loan term means higher monthly payments but dramatically less total interest. A 15-year mortgage at 6% on $200,000 has a monthly payment of $1,687 (vs. $1,199 for 30 years) but total interest of only $103,788 — saving over $127,000 compared to the 30-year option.
Key Features
- Standard amortizing loan calculation with equal monthly payments
- Flexible input: loan term in years or months
- Shows monthly payment, total interest, total cost, and interest-to-principal ratio
- Instant calculation for quick loan scenario comparison