Loan Payment Calculator
Estimate your monthly loan payment and total interest cost from the loan amount, annual interest rate, and term. Works for personal loans, car loans, and business loans. Free, no signup.
How to use this tool
- 1Enter the loan amount - the total amount you are borrowing, not including any fees.
- 2Enter the annual interest rate as a percentage. Use the rate from your loan offer, not a monthly rate.
- 3Enter the loan term in years. For a 36-month loan, enter 3.
- 4Read the three results: monthly payment, total amount paid over the full term, and total interest paid.
- 5Adjust any field to compare different loan amounts, rates, or terms side by side.
Formula used
Example
Monthly payment is 304.22. Total paid is 10,951.92. Total interest is 951.92. Over the 3 years, interest adds about 9.5% to the cost of the loan.
Monthly payment drops to 193.33 - saving 110.89 per month. But total interest rises to 1,599.68 - costing 647.76 more overall. A longer term lowers payments but raises total cost.
Common use cases
- Estimating monthly repayments before applying for a personal or car loan
- Comparing two loan offers: same amount but different rates or terms
- Checking if a business loan payment fits within monthly cash flow
- Working out how much extra you pay in interest by choosing a longer term
- Planning a mortgage or equipment finance: comparing 15-year vs 30-year repayments
Common mistakes
- Entering a monthly rate instead of an annual rate - always use the annual rate. A 1% monthly rate is 12% annually, which makes a significant difference.
- Not adding fees to the loan amount - origination fees or broker fees are sometimes added to the loan balance. Include them for an accurate total cost.
- Comparing loans by monthly payment alone - a longer term reduces monthly payments but increases total interest paid considerably.
- Treating this as the exact lender quote - actual payments may differ slightly due to lender rounding, payment date adjustments, or additional fees.
Frequently asked questions
Is this the exact monthly payment?
It is a close estimate based on standard amortisation. Actual payments may differ slightly due to lender rounding, origination fees, or payment date adjustments. Always confirm the final figure with your lender before signing.
Does this include fees or insurance?
No. It calculates principal and interest only. Setup fees, loan protection insurance, early repayment penalties, and other charges are not included. Add them separately to get a full cost picture.
What if the interest rate is 0%?
At 0% interest, the monthly payment is simply the loan amount divided by the number of months. For example, 12,000 over 3 years is 333.33 per month. The calculator handles this correctly.
How does the loan term affect total cost?
A longer term reduces the monthly payment but increases the total interest paid. A shorter term means higher monthly payments but significantly less interest overall. Compare the 'total interest' figure across terms to see the real cost difference.
What is amortisation?
Amortisation is the process of paying off a loan through regular scheduled payments. Each payment covers the month's interest first, with the remainder reducing the principal. Early payments are mostly interest; later payments are mostly principal.
Can I use this for a mortgage?
Yes, the formula is the same. Enter the mortgage amount, annual interest rate, and term in years. Note that mortgages often have additional costs (arrangement fees, valuation, insurance) not captured here, and rates may be fixed only for an initial period.
How do I work out the maximum loan I can afford?
Start with your maximum affordable monthly payment and work backwards. Adjust the loan amount field until the monthly payment matches your budget. This gives you the maximum borrowing amount at the current rate and term.
Related tools
Last updated