Considering a loan and need to know how much you might have to pay every month? Use our Loan Calculator to calculate your monthly payment, total interest and total repayment amounts for your loan based on the loan amount, annual rate and term of the loan.
All you have to do is enter your loan information and press Calculate to get a rough estimate of how your loan will be split up. The calculator can be useful when comparing various loan amounts, interest rates and repayment periods.
Note: This calculator is intended to give an estimate using the information provided. Actual loan payments may vary due to the difference in the way interest is calculated, fees, insurance, taxes, payment dates, and other charges. Financial institutions often explicitly say that the calculation results are illustrative and not an offer for a loan.
To use the Loan Calculator, follow these steps:
The calculator is easy to operate.
- Enter the Loan Amount
- Type in the amount that you want to borrow.
- For example:
Loan Amount: $10,000
2 Type in the interest rate that is provided for the loan annually.
- For example:
- Annual Interest Rate: 6%
- Select the number of payments per year.
- Input the term of the loan.
- For example:
- Loan Term: 2 years
- Click Calculate
The calculator will approximate:
- Monthly Payment
- Total Payment
- Total Interest
- Number of Payments
- Principal
- Interest
This will help you to see the big picture of the amount you are borrowing.
What Does a Loan Calculator Calculate?
A loan calculator can assist you with comprehending a few significant elements of the loan.
Monthly Payment
The figure you would see as your monthly payment based on the calculator’s assumptions.
Total Interest
This indicates the total amount of interest you would pay over the life of the loan.
Total Payment
The approximate amount of principal and interest over the life of the loan.
Number of Payments
If the loan is to be repaid over a period of 2 years with monthly repayments, the loan would normally have:
2 × 12 = 24 payments
Loan Calculator Example
Suppose you borrow:
Loan Amount: $10,000
Annual Interest Rate: 6%
Loan Term: 2 years
Based on a common monthly amortization formula, the monthly payment is estimated to be about:
$443.21
The total estimated repayments are about:
$10,637.04
And its total interest is estimated to be around:
$637.04
Calculations are based on a fixed annual rate, monthly payments and no other fees.
What is a monthly loan payment?
The monthly payment for a typical fixed-rate amortizing loan is:
M = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
Where:
M = Monthly payment
Principal or original loan amount (P)
r = interest rate per month (as a decimal)
n = Number of monthly payments made
The annual interest rate is first converted to a monthly rate which is then used in the formula.
A 6% annual rate, divided by 12, gives the monthly rate:
0.5%
The calculator does these calculations for you without having to labor the formula.
Why is the term of a loan important?
The length of the term can significantly impact your monthly payment and the interest paid.
A shorter period of time typically equates to:
- Higher monthly payments
- Lower total interest
- Faster repayment
In general, a longer loan period equates to:
- Lower monthly payments
- More total interest
- Longer repayment period
This is why it’s important to consider the monthly payment alone as part of an overall financial picture.
Comparing the total interest and total repayment is also a good idea.
The amount of loan and interest rate.Loan quantity and interest rate.
Two of the most important factors affecting loan costs are the amount borrowed and the interest rate.
When taking out more loans, the amount repaid will be higher.
Likewise, a higher rate of interest typically means higher loan costs.
You can compare, for instance, using the calculator:
Scenario A
$10,000 at 6% for 2 years
with:
Scenario B
$10,000 at 8% for 2 years
This is because you can compare the scenarios to see how the estimated repayment changes with the rate of interest.
Monthly Payment vs Total Cost
Don’t just compare the monthly payment when comparing loans.
Look at these three numbers:
- Monthly Payment
- The amount you will be required to pay monthly.
- Total Interest
- Total amount of interest you could pay over the loan.
- Total Repayment
- The total amount returned in the calculator’s calculations.
An inexpensive loan doesn’t always have the lowest monthly payment.
Some of the most frequent questions about the common loan calculator.
Loan calculators are used to respond to such questions as:
- What will the monthly payment on my loan be?
- What is the interest amount?
- What is the total amount that I will pay back?
- How will my interest rate impact my payment?
- What would happen if I go for a longer loan?
- What is the number of payments I will have to make?
- What is the interest I am paying on my payment?
- How do I work out an interest comparison of 2 loans?
We have created a calculator to help make estimates to these common questions.
Frequently Asked Questions
What is the monthly repayment amount on my loan?
- Put in the amount of the loan, annual interest rate, and the number of years of the loan. The calculator will estimate monthly payments based on the appropriate payment formula.
How are monthly payment and total payment different?
- The monthly payment is the monthly amount that the payment is expected to be. Total payment is the sum of all the payments over the life of the loan.
Will the loan term be longer than the term, or lower?
- In most cases, a longer term will result in lower monthly payments, but will also mean that more interest is paid over the life of the loan.
Are loan fees included on the calculator?
- Basic calculations may not include lender-specific insurance, taxes, lender-specific fees, or penalties. Look at the lender’s terms to find out the total cost.
Is it possible to use this as an EMI calculator?
- Yes, in the case of a standard amortization model, the monthly payment is usually called an EMI (equivalent installment payment)
Will the calculator display the total interest?
- Yes. The output should display the estimated interest paid as well as the total payment and principal paid.
May I make comparisons of various interest rates?
- Yes. Calculate the difference in the monthly payment, total interest paid and total repayment for different interest rates.
Is the Loan Calculator a no-cost calculator?
- Yes. The online Loan Calculator can be used for free.
Is the result a guaranteed loan quote?
- No. This yields an estimation, depending on the data inputted and the assumption of the calculator. Actual lender calculations may vary.