Loan Repayment Calculator
Find the total repayment cost of any loan. See your monthly payment, total amount repaid, total interest charged, and the effective total cost of borrowing — all from principal, rate, and term.
How to use this tool
- Enter loan principal, annual interest rate and loan term in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your monthly payment and the full breakdown beneath it.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Monthly Payment: PMT = P × r(1+r)n / [(1+r)n − 1]
Total Repaid = PMT × n; Total Interest = Total Repaid − P; Interest % = (Total Interest / P) × 100
How it works
The amortization formula computes the constant monthly payment required to fully repay the loan over the chosen term. Multiplying that payment by the number of months gives the total repaid amount.
Subtracting the original principal from the total repaid yields the total interest cost, which as a percentage of the principal shows borrowing efficiency — the higher this figure, the more expensive the loan relative to its size.
Worked example
$25,000 auto loan at 7% for 5 years
- Monthly rate r = 7% ÷ 12 ≈ 0.58333% = 0.0058333
- Number of payments n = 5 × 12 = 60
- PMT = 25,000 × 0.0058333 × (1.0058333)^60 / [(1.0058333)^60 − 1]
- (1.0058333)^60 ≈ 1.41760; PMT = 25,000 × 0.0058333 × 1.41760 / 0.41760 ≈ 495.03
- Total repaid = $495.03 × 60 = $29,701.80; Total interest = $4,701.80 (18.81% of principal)
Monthly payment is $495.03; total interest over 5 years is $4,701.80, or 18.81% of the loan amount.
Common mistakes to avoid
- Entering an annual interest rate without converting it to a monthly rate — the PMT formula requires a periodic rate equal to APR divided by 12 for monthly payments.
- Ignoring origination fees, insurance, or prepayment penalties when estimating total cost of borrowing; the calculator shows contractual interest only, not all-in borrowing costs.
- Comparing loans with different terms only on monthly payment — a lower monthly payment from a longer term almost always means higher total interest paid over the life of the loan.
Key terms
- Total Repaid
- The sum of all monthly payments made over the life of the loan, including both principal and interest.
- Amortization schedule
- A table showing how each payment is split between interest and principal reduction for every period of the loan.
- Loan term
- The length of time over which the loan is to be fully repaid, typically expressed in years.
- Interest as % of principal
- Total interest paid divided by the original loan amount, expressed as a percentage; a measure of the relative cost of the loan.
Frequently asked questions
- How does making an extra payment each year affect total interest?
- Even one extra principal payment per year can reduce total interest substantially and shorten the loan term, because all principal reductions eliminate future interest that would have accrued on that balance.
- What is the difference between APR and the interest rate used in this calculator?
- The interest rate (or note rate) is the cost of borrowing the principal. APR is broader and includes fees amortized over the loan term. This calculator uses the stated interest rate; for total cost comparison, use APR.
- Does the order of early payments matter?
- Yes. Extra payments made earlier in the loan term save more interest because the outstanding balance is higher, so more interest is accruing per day. Early extra payments have an outsized impact compared to the same payments made near the end.