Loan Calculator

An amortising loan is repaid in equal monthly instalments. The payment is principal × monthly rate ÷ (1 − (1 + monthly rate)^(−months)), where the monthly rate is the annual rate divided by twelve. Borrow 30,000 at five percent over 36 months and the instalment is a little under 900, with roughly 2,370 paid in interest across the term.

How to use

1. Enter the amount borrowed.
2. Enter the annual interest rate. On a variable-rate loan, use the current rate and then run the figures again a point or two higher.
3. Enter the term in months.
4. Read the monthly payment and total interest, then vary the term to see how the total moves.

When you actually need this

• Checking whether the instalment fits your income before signing.
• Comparing total interest across a 24-month and a 36-month term.
• Turning several lenders' quoted rates into comparable monthly costs.
• Estimating the effect of a one-point rate rise on the payment.

Repayment structures and what they cost

With equal instalments the payment stays flat but its composition shifts: early payments are mostly interest and the balance falls slowly, which matters if you intend to repay early. A constant-principal schedule instead pays a fixed slice of principal plus interest on the remaining balance, so instalments start higher and fall, and the total interest is lower. An interest-only structure with a bullet repayment costs the most overall. None of these figures include arrangement fees, early repayment charges, insurance or stamp duty, so the real cost of credit runs above the interest shown. On a variable-rate loan the total assumes today's rate holds for the whole term, which it rarely does.

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FAQ

What formula does Loan Calculator use?

It uses the standard published formula for this calculation, applied exactly as written with no rounding until the final result. The inputs you provide are the only variables — there are no hidden assumptions or regional adjustments.

How accurate is the result from Loan Calculator?

The arithmetic is exact to the precision your browser supports. Accuracy in practice depends on your inputs: an estimate built on rounded figures will itself be an estimate, so enter the most precise values you have.

Can I use this for official or financial decisions?

Treat the output as a well-calculated estimate rather than professional advice. For medical, tax, legal or lending decisions, confirm the figure with a qualified professional or the institution involved before acting on it.