Loan Calculator
Calculate monthly loan repayments, total interest paid, and effective annual rate for any type of loan. Visual breakdown shows principal vs. interest split.
ⓘ Results are indicative only and do not constitute investment, financial, tax, or legal advice. Consult a qualified professional before making any financial decisions.
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How to Use the Loan Calculator
Enter the loan amount, the annual interest rate (APR), and the loan term in months. Click Calculate to see your monthly payment, total cost, and how much goes to interest vs. principal.
Loan Repayment Formula
M = P × [r(1+r)^n] / [(1+r)^n − 1]
Where P = loan amount, r = monthly rate (APR ÷ 12), n = number of months.
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Worked Examples
Personal loan
$15,000 at 9% APR over 36 months:
- Monthly payment: $477
- Total interest: $2,172 (12.7% of loan amount)
Car loan
$25,000 at 7% APR over 60 months:
- Monthly payment: $495
- Total interest: $4,700
Effect of term length
$20,000 at 8% APR — comparing 24, 48, and 72 months:
- 24 months: $904/mo, $1,696 interest
- 48 months: $488/mo, $3,424 interest
- 72 months: $350/mo, $5,200 interest
Longer terms reduce monthly payments but significantly increase total cost.
Frequently Asked Questions
What is the difference between APR and interest rate?
The interest rate is the basic cost of borrowing. The APR (Annual Percentage Rate) includes fees and other costs, making it the true annual cost. Always compare APRs when shopping for loans.
What is the effective annual rate (EAR)?
The EAR accounts for monthly compounding. It is calculated as (1 + r/12)^12 − 1. For an 8% APR with monthly compounding, the EAR is 8.30% — slightly higher than the stated rate.
Can I pay off a loan early?
Usually yes, but some loans have prepayment penalties. Check your loan agreement. Early payoff saves interest — on a 5-year loan paid off in 3 years, you could save 30-40% of the total interest.
How does my credit score affect the interest rate?
A higher credit score typically means lower interest rates. The difference between excellent and fair credit can be 4-8 percentage points, which on a $20,000 loan over 5 years adds up to thousands of dollars.