Loan Calculator
Calculate monthly payments, total interest, and view the full amortisation schedule.
How loan payments are calculated
Standard loans (mortgages, car loans, personal loans) use an amortising payment structure. Each monthly payment is the same amount but is split differently between principal and interest over the loan's life. Early payments are mostly interest; later payments are mostly principal. The monthly payment is calculated using the annuity formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate, and n is the number of months.
Frequently asked questions
Why do I pay more interest at the start of a loan?
Interest is calculated on the outstanding balance. At the start of a loan, the balance is highest, so the interest portion of each payment is highest. As you pay down the principal, the balance falls, meaning less interest accrues each month and more of your fixed payment goes toward principal.
What does APR mean vs interest rate?
The interest rate is the annual cost of borrowing the principal. APR (Annual Percentage Rate) includes the interest rate plus any mandatory fees (origination fees, broker fees, etc.), expressed as a single percentage. APR is a more complete measure of the true cost of the loan. This calculator uses the interest rate only — enter the APR if you want to include fees in your estimate.
How can I reduce the total interest I pay?
Two main approaches: (1) Make overpayments — any extra money paid above the minimum goes directly to reducing principal, shortening the loan term and reducing total interest. (2) Refinance to a lower interest rate when rates fall. Even a 0.5% rate reduction on a 25-year mortgage can save tens of thousands in interest.
