A loan repayment calculator answers a simple question before you borrow: what will this loan cost you every month? Enter the amount, the annual interest rate and the number of years, and it works out the fixed monthly payment that would clear the loan, together with the total you would pay and the total interest. It is a planning aid for any fixed-rate loan repaid in equal monthly instalments, such as a personal loan, a car loan or a mortgage on a fixed rate. It is deliberately general: unlike the Gold Loan Calculator on this site, it is not tied to gold, to a live price, or to any lender’s terms.
It is an estimate, not an offer. The rate you enter is an assumption you choose, and real loans carry fees, insurance and conditions that change the amount you actually pay. The value of the calculator is comparison: change one number at a time, the amount, the rate or the term, and see which change moves the monthly payment most, and what a longer term really costs in total interest.
Use it when you are weighing up a loan, comparing two offers, or checking whether a monthly payment fits your budget. All of the maths happens in your browser, and nothing you enter is sent anywhere or stored.
What the three numbers mean
The loan amount is the principal you borrow, the sum you receive at the start. A larger loan means a larger monthly payment and, at the same rate and term, more total interest. Enter the amount you actually plan to borrow, not the price of whatever you are buying, if part of it comes from savings.
The annual interest rate is the percentage charged on the loan each year. This calculator turns it into a monthly rate by dividing by 100 and then by 12, so a rate of 6% a year means 0.5% added each month. Small differences in the rate matter more than they look, especially over long terms, so it is worth testing a lower and a higher rate than the one you were quoted.
The loan term is the number of years over which the loan is repaid. The calculator turns years into months, so 5 years is 60 monthly payments, and the term can include fractions, so 7.5 years means 90 months. A longer term lowers the monthly payment but raises the total interest, because interest is charged for longer.
The calculator shows three results. The monthly payment is the fixed amount you would pay each month. The total paid is the monthly payment multiplied by the number of months. The total interest is the total paid minus the loan amount, which is the true cost of borrowing in money terms.
How the calculation works
The calculation assumes equal monthly payments and a fixed rate for the whole term. The monthly rate is the annual rate divided by 100 and then by 12, and the number of months is the number of years multiplied by 12. The monthly payment is the loan amount multiplied by the monthly rate, divided by one minus the monthly growth factor raised to the negative number of months. In other words, the payment is set so that the loan balance reaches exactly zero after the final payment.
If the annual rate is zero, there is no interest to charge, and the monthly payment is simply the loan amount divided by the number of months. With the default values, a loan of 10,000 at 6% a year over 5 years, the monthly rate is 0.5% and there are 60 months. The monthly payment is about 193.33, the total paid is about 11,599.68, and the total interest is about 1,599.68.
The trade-off is always the same: shortening the term raises the monthly payment but cuts the total interest, while lengthening the term lowers the monthly payment but raises the total interest. Doubling the term does not halve the payment, because interest keeps accruing. Try the same loan over 3 years and over 10 years to see how much the total interest changes.
How to use this calculator
- Enter the loan amount you plan to borrow.
- Enter the annual interest rate you want to assume, as a percentage.
- Enter the loan term in years, including fractions if you need them.
- Click “Calculate loan repayment” and read the three results: the monthly payment, the total paid, and the total interest.
Worked example
With the default values, a loan amount of 10,000, an annual rate of 6% and a term of 5 years, the monthly payment is 193.33, the total paid is 11,599.68, and the total interest is 1,599.68. In other words, about 14% of everything you pay is interest, and the rest repays the loan itself.
As a check with no interest, enter a loan amount of 12,000, a rate of zero and a term of 1 year. The monthly payment is 1,000.00, the total paid is 12,000.00, and the total interest is 0.00, which is exactly what you would expect when no interest is charged.
As a one-year check, enter a loan amount of 1,000, a rate of 12% and a term of 1 year. The monthly payment is 88.85, the total paid is 1,066.19, and the total interest is 66.19.
What this calculator does not do
This calculator does not include arrangement fees, insurance, taxes or any other charges a lender may add. The total paid is the sum of the monthly payments only, so the real cost of a loan can be higher. It also assumes one fixed rate for the whole term, with no missed payments and no extra payments. A variable rate, a payment holiday or an early repayment would all change the result.
It is not a loan offer, and it does not check whether you can afford the payment or whether a lender would accept you. Use it to compare the shape of different loans, then check the lender’s own figures, including the annual percentage rate and all fees, before you borrow.
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Frequently Asked Questions
What is a loan repayment calculator?
It estimates the fixed monthly payment needed to clear a loan over a chosen term at a chosen annual interest rate, and shows the total paid and the total interest.
How is the monthly payment worked out?
The annual rate is turned into a monthly rate, the term into months, and the payment is set so the balance reaches zero after the final payment, assuming a fixed rate and equal monthly payments.
What happens if the interest rate is 0%?
With a zero rate there is no interest, so the monthly payment is simply the loan amount divided by the number of months, and the total interest is zero.
Does this calculator include fees or insurance?
No. It covers interest only. Arrangement fees, insurance and other lender charges are not included, so the real cost of a loan can be higher.
Can I use it for a mortgage or a car loan?
Yes. It works for any fixed-rate loan repaid in equal monthly instalments. It does not suit variable-rate loans, where the payment changes when the rate changes.
What if I make extra payments?
Extra payments are not modelled. Paying more than the monthly payment, or repaying early, would normally reduce the total interest, subject to any early repayment charge.
Is the monthly payment guaranteed?
No. The payment is an estimate from the amount, rate and term you enter. A lender’s actual payment depends on its own rate, fees and terms.