Loan Calculator
Enter an amount, rate and term to see the monthly payment, total repaid and interest cost.
How the loan calculation works
A standard loan is repaid in equal monthly instalments that each cover the interest for that month plus a slice of the balance. The instalment comes from the amortization formula:
M = P * r * (1 + r)^n / ((1 + r)^n - 1)
P is the amount borrowed, r is the monthly rate (annual rate divided by 12) and n is the number of monthly payments. Because the payment is fixed, the split between interest and principal shifts over time: early payments are mostly interest, later ones mostly principal. The table above shows exactly how the balance falls each year.
A worked example
Borrow 10,000 at 7% over 3 years. The monthly rate is 0.07 / 12 = 0.005833 across 36 payments, giving a monthly payment of about 309. You repay roughly 11,120 in total, so the interest comes to about 1,120. Stretch the same loan to 5 years and the monthly payment drops to about 198, but the total interest climbs to roughly 1,880 because you are borrowing the money for longer.
Rate, term and total cost
Two levers control what a loan costs: the interest rate and the term. A lower rate always saves money. A shorter term raises the monthly payment but cuts the total interest, while a longer term does the opposite. Use the calculator to try a few combinations before you commit, and remember to check whether the advertised figure is a plain interest rate or an APR that already folds in fees.
A word on advertised rates: lenders often quote a "representative APR" that only 51% of accepted borrowers need to be offered, so your personal rate can be higher depending on your credit history. Before signing, confirm the exact rate, term and any arrangement or early settlement fees, then plug the real numbers in here to see the true monthly cost and total interest.
Buying a home instead? The mortgage calculator handles a deposit and property price. To see what regular saving could earn, try the compound interest calculator, and the percentage calculator helps with any rate maths in between.