Loan Interest Calculator

Understanding what a loan truly costs goes beyond the monthly payment — the total interest paid over the life of the loan is the full price of borrowing. This calculator takes your principal, annual interest rate, and term in years and returns the monthly payment, total interest charged, and total amount repaid. Use it to compare loans side by side: a $20,000 loan at 8% for 5 years costs about $4,300 in interest, while the same loan stretched to 7 years costs nearly $6,200. Rate comparisons are equally telling — even a 1% difference in rate on a large loan adds up to thousands of dollars over the term. This calculator works for personal loans, auto loans, student loans, and mortgages.

The standard amortization formula determines the fixed monthly payment: M = P × r(1 + r)^n / [(1 + r)^n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (term in years × 12). This fixed payment ensures the loan is fully retired at the end of the term. Total amount repaid = M × n. Total interest = total repaid − original principal. The formula reflects the effect of compound interest: in the early months, most of M goes to interest; later, more goes to principal as the balance decreases.