Loan Repayment Calculator

Estimate the monthly payment and total interest on a fixed-rate loan, see how extra payments shorten the term, and open a year-by-year repayment schedule.

The amount you borrow, before any deposit you pay yourself.

The yearly rate on the loan. Fixed-rate loans only.

For 18 months type 1.5.

Optional overpayment on top of the required payment.

Only changes the symbol. The maths is identical in every currency.

Type plain numbers (commas are fine). Results are estimates for planning and learning, not financial advice.

Try an example:

Each example fills the form and calculates straight away. Change any value to make it your own.

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In plain words: enter how much you borrow, the yearly interest rate and how many years you will take to repay it. The calculator shows the monthly payment, how much interest the loan will cost over its life and, if you add an extra payment, how many months and how much interest you save.

Last updated by Hira Science Academy. Educational tool; see the limitations section below.

What this loan repayment calculator does

This loan repayment calculator estimates the regular monthly payment on a fixed-rate loan that is fully repaid over its term. Enter the amount borrowed, the annual interest rate and the term. You get the monthly payment, the total you will repay, the total interest, and a yearly schedule showing how much of your payments reduces the balance and how much goes to interest. An optional extra monthly payment shows how much time and interest a small overpayment can save. Use it for car loans, personal loans, student loans and the principal-and-interest part of a mortgage. Before you commit, check that the payment fits your income with the monthly budget calculator. To see what interest does when it works in your favour, try the compound interest calculator or the savings calculator.

How to use the loan repayment calculator

  1. Enter the loan amount: what you borrow after any deposit or down payment.
  2. Enter the annual interest rate from your lender's offer.
  3. Enter the loan term in years. Use decimals for part-years, for example 3.5.
  4. Optional: enter an extra monthly payment to see the payoff time and interest saved.
  5. Press Calculate. Read the monthly payment first, then open the yearly schedule.
  6. Change the term or the rate and calculate again to compare offers side by side.

The loan payment formula

Monthly payment on a fully amortizing loan
\[ M = \frac{P \, i}{1 - (1 + i)^{-n}} \]
Total interest
\[ \text{Interest} = M \times n - P \]
Zero-interest loan
\[ M = \frac{P}{n} \]

What each symbol means

\(M\) — monthly payment
The fixed amount you pay each month for principal and interest.
\(P\) — principal
The amount borrowed.
\(i\) — monthly interest rate
The annual rate divided by 12, as a decimal. 6.5% a year gives \(i = 0.065/12\).
\(n\) — number of payments
The term in years multiplied by 12.

Worked examples

Example 1: a $25,000 loan at 6.5% over 5 years

  1. Monthly rate: \(i = 0.065/12 = 0.005417\). Payments: \(n = 5 \times 12 = 60\).
  2. Discount factor: \((1+i)^{-60} = 0.723161\), so \(1 - 0.723161\) is the denominator.
  3. Payment: \(M = 25{,}000 \times i / (1 - 0.723161) \approx\) $489.15.
  4. Total repaid: $29,349.22. Interest: $4,349.22.
  5. In month 1, interest is \(25{,}000 \times i = \) $135.42, so only $353.74 reduces the balance.

Example 2: the same loan with an extra $100 a month

  1. Required payment stays $489.15. You pay $489.15 + $100 each month, and the extra goes straight to principal.
  2. The balance reaches zero after 49 months (4 years 1 month), which is 11 months sooner.
  3. Interest falls from $4,349.22 to $3,483.78, a saving of about $865.44.
  4. Enter 100 in the extra payment box to confirm.

Example 3: $200,000 at 6.5%, 30 years versus 15 years (principal and interest)

  1. 30 years: payment $1,264.14, total interest about $255,089.
  2. 15 years: payment $1,742.21, total interest about $113,599.
  3. The shorter loan costs $478.08 more per month but saves about $141,490 in interest.
  4. This is the standard trade-off: a lower payment now against a higher lifetime cost.

Example 4: a $30,000 car loan at 7%, 4 years versus 6 years

  1. 4 years: payment $718.39, interest $4,482.59.
  2. 6 years: payment $511.47, interest $6,825.85.
  3. Stretching to 6 years lowers the payment but adds $2,343.26 of interest.

Example 5: a zero-interest instalment plan

  1. A $12,000 purchase at 0% over 24 months: \(M = 12{,}000 / 24 = \) $500.00.
  2. There is no interest, so total repaid equals the amount borrowed. Always check for fees on such plans.

How the loan term changes the cost

A longer term lowers the monthly payment but increases the interest because the balance stays higher for longer. The table keeps the amount ($20,000) and rate (7%) fixed and changes only the term.

$20,000 at 7%, by loan term
TermMonthly paymentTotal repaidTotal interest
3 years$617.54$22,232$2,232
5 years$396.02$23,761$3,761
7 years$301.85$25,356$5,356

Illustrative arithmetic only. Your lender's quote may differ because of fees, rounding and payment dates.

How amortization works

Amortizing loan
A loan repaid in equal instalments that each cover that month's interest plus part of the principal.
Why early payments are mostly interest
Interest is charged on the outstanding balance. At the start the balance is highest, so the interest share of each payment is highest. As the balance falls, more of each payment reduces principal.
Extra payments
Money paid above the required amount, when applied to principal, lowers the balance immediately. Every later month then charges less interest.
Rate versus APR
The interest rate is the cost of borrowing the principal. The APR also includes some fees, so it is usually a little higher. Enter the interest rate here.

What this estimate does not include

  • Property tax, home insurance and mortgage insurance on a home loan.
  • Arrangement, valuation or processing fees unless you add them to the loan amount.
  • Variable or introductory rates. The rate is assumed fixed for the whole term.
  • Payment-date details. Lenders may count days precisely or round each payment, which changes the total by a small amount.
  • Interest-only periods, balloon payments and Islamic financing structures. They follow different schedules. Use your provider's illustration for these.

Ways to reduce the interest you pay

  • Shorten the term if the higher payment is affordable.
  • Make extra payments and confirm they are applied to principal.
  • Compare offers using the same term and the same fees.
  • Improve your credit profile before applying, where lenders price by risk.
  • Borrow less. A larger deposit lowers both the payment and the interest.
  • Check percentages yourself with the percentage calculator and the exponent calculator if you want to verify the formula.

Common mistakes to avoid

  • Comparing only the monthly payment. A lower payment over a longer term usually costs more in total.
  • Entering the term in months. The term is in years. Enter 18 months as 1.5.
  • Using the APR as the interest rate. Use the rate on the offer for the payment, and compare lenders using APR.
  • Forgetting taxes, insurance and fees when judging whether a payment is affordable.
  • Assuming extra payments always reduce the principal. Some lenders apply them to future instalments unless told otherwise.
  • Borrowing the maximum approved. What a lender will offer is not the same as what fits your budget.

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Assumptions and limitations

  • Fixed rate, equal payments. The rate does not change and each payment is the same.
  • Principal and interest only. Taxes, insurance, fees and penalties are excluded unless you add them to the loan amount.
  • Payments made on schedule. Missed or late payments add charges not modelled here.
  • Unrounded payment. Real lenders round each payment to the cent, so totals can differ by a few cents or dollars.
  • Privacy. The maths runs in your browser. The numbers you type are not sent to a Hira Academy calculation server. Like the rest of the site, the page loads Google Analytics and advertising scripts; see the Privacy Policy.
Not financial advice. This calculator is for general education and planning. It does not know your fees, taxes, product terms or personal circumstances, and no calculator can guarantee an investment return, loan approval or savings outcome. Check figures with your bank, lender or a qualified professional before you decide.

Frequently asked questions about the Loan Repayment Calculator

How is a monthly loan payment calculated?

The standard formula is M = P × i / (1 − (1 + i)^−n), where P is the amount borrowed, i is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly payments. For $25,000 at 6.5% over 5 years the payment is about $489.15.

How much interest will I pay on my loan?

Total interest equals the monthly payment multiplied by the number of payments, minus the amount borrowed. On $25,000 at 6.5% over 5 years you repay about $29,349.22, so interest is about $4,349.22.

What is amortization?

Amortization is repaying a loan in regular instalments that cover both interest and part of the principal, so the balance reaches zero at the end of the term. Early payments are mostly interest and later payments are mostly principal.

Why is most of my early payment interest?

Interest is charged on the outstanding balance, which is highest at the start. As you repay principal, the balance falls and the interest portion of each payment shrinks.

How do extra payments save money?

Extra money applied to principal lowers the balance straight away, so less interest is charged in every later month. On a $25,000 loan at 6.5% over 5 years, an extra $100 a month saves about $865.44 and finishes 11 months early.

Is a 15-year or 30-year loan better?

A 15-year loan has a higher payment but far less total interest. On $200,000 at 6.5% the payments are about $1,742.21 and $1,264.14 respectively, and the 30-year loan costs roughly $141,490 more in interest. The right choice depends on what payment your budget can safely carry.

Does this include taxes, insurance and fees?

No. It covers principal and interest only. For a mortgage, add property tax, insurance and any mortgage insurance. For other loans, add the lender's fees to the loan amount if they are financed.

What if my loan has a variable interest rate?

The calculator assumes a fixed rate. For a variable-rate loan, run it at your current rate and at a higher rate to see how the payment could change.

What is the difference between interest rate and APR?

The interest rate is the yearly cost of the principal. APR also includes certain fees and is meant for comparing offers. Use the interest rate to calculate the payment.

Can I use this for a car loan, student loan or personal loan?

Yes, as long as the loan has a fixed rate and equal monthly payments. Enter the amount, rate and term from your offer. Federal and other student loans may have special repayment plans that differ.

Does it work with a 0% interest rate?

Yes. When the rate is 0% the payment is simply the amount borrowed divided by the number of payments.

Are the results guaranteed?

No. They are estimates. Your lender's contract controls the real payment, and fees, rounding and payment dates can make it differ slightly.

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