What it does and when to use it
The calculator estimates monthly payment, total interest, and total loan cost.
Use it before borrowing or when comparing amount, APR, and term.
How to Calculate Loan Repayments
At a glance
What to enter
Enter principal, annual interest rate, and the number of months or years.
How to read the result
Review both monthly affordability and total cost; a lower payment can mean more interest.
Most loans use the standard amortization method — equal monthly payments throughout the loan term.
Monthly Payment Formula
M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1]
M = Monthly payment
P = Principal loan amount
r = Monthly interest rate (annual rate ÷ 12)
n = Number of months
Example
$25,000 loan at 7% APR for 4 years (48 months):
r = 7% ÷ 12 = 0.583% = 0.00583
M = 25,000 × [0.00583×(1.00583)⁴⁸] ÷ [(1.00583)⁴⁸−1]
M ≈ $598/month
Total paid: $28,704 | Interest: $3,704
How to Save on Interest
- Pay off early when there's no prepayment penalty
- Add extra monthly payments — even $50 extra saves hundreds
- Choose a shorter term if the higher payment is affordable
Common mistakes
- Comparing loans by monthly payment alone.
- Ignoring fees or variable-rate terms.
Frequently asked questions
Will the payment stay fixed?
Only when the rate and loan terms are fixed.
Is a shorter term always better?
It usually lowers interest but raises the monthly payment.
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