How to use it
- Enter the loan amount and the annual interest rate.
- Enter the term and choose whether it is in years or months.
- Pick the repayment type. Level payments are the usual choice for personal loans and car loans in most countries.
- Read the payment, the total interest and the total you repay. The schedule below shows every month; on a phone, tap Show schedule.
How it works
The monthly rate is the annual rate divided by 12: 12% a year is 1% a month. Payments are due at the end of each month.
Level payments (annuity): payment = P × r ÷ (1 − (1 + r)^−n). Each month the interest is the balance × r, and the rest of the payment reduces the balance.
Declining payments (equal principal): each month you repay P ÷ n of the principal plus interest on the remaining balance. Total interest is r × P × (n + 1) ÷ 2.
With a 0% rate both methods simply split the amount into equal parts.
Worked example
You borrow 20,000 at 10% a year for 5 years (60 months). With level payments the monthly payment is 424.94 and you pay 5,496.45 in interest, 27.5% of the amount borrowed. With declining payments the first payment is 500.00, the last 336.11, and total interest falls to 5,083.33.
Tips
- Compare the total, not just the monthly payment. A longer term lowers the payment but raises the total interest.
- Check the APR. Fees turn a low headline rate into a higher real cost.
- Paying early saves interest. Every extra payment reduces the balance that interest is charged on. To see the effect month by month, try the mortgage calculator’s extra payment field.
The results are estimates for comparison and planning, not financial advice; your loan agreement is what counts.