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💳 Loan Calculator

Calculate monthly repayments, total interest, and total cost for personal loans, car loans, and business loans — free and instant.

Enter Your Values

Total amount you are borrowing
Annual percentage rate (APR)
Total number of monthly payments

How This Loan Calculator Works

Enter your loan amount (the amount you are borrowing), the annual interest rate as quoted by your lender (the APR), and the loan term in months. The calculator uses the standard amortization formula to compute your fixed monthly payment, the total amount you will repay, and the total interest charged over the life of the loan.

The results help you compare loan offers side by side and understand the true cost of borrowing — not just the monthly payment, but everything you will pay from start to finish.

How Loan Term Affects Total Cost

The monthly payment is only part of the picture. A longer loan term reduces your monthly payment but dramatically increases the total interest you pay. Here is what a $20,000 loan at 10% looks like across different terms:

$645/mo3-year term
$3,231 total interest
$425/mo5-year term
$5,496 total interest
$265/mo10-year term
$11,800 total interest

The 10-year term has the lowest monthly payment but costs nearly 4x more in interest than the 3-year term. Always choose the shortest loan term your budget can comfortably support.

Types of Loans This Calculator Covers

  • Personal loans: Unsecured loans for any purpose — typically 1-7 years, 6-36% APR depending on credit
  • Car loans: Secured loans against a vehicle — typically 2-7 years, 4-15% APR
  • Business loans: For business purchases or working capital — terms and rates vary widely
  • Student loans: Education financing — use this to model repayment options
  • Debt consolidation loans: Combine multiple debts into one payment — compare the APR carefully

What to Check Before Taking a Loan

  • APR vs interest rate: The APR includes fees and is the true cost of borrowing — always compare APRs, not just interest rates
  • Prepayment penalties: Some lenders charge a fee for paying off a loan early — check your agreement
  • Origination fees: Some loans deduct an upfront fee from the disbursed amount — factor this in
  • Variable vs fixed rate: Fixed rates give payment certainty; variable rates can rise over time

Frequently Asked Questions

How is a monthly loan payment calculated? +
Monthly payments are calculated using the amortization formula: M = P[r(1+r)^n]/[(1+r)^n-1], where P is the principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of payments. This produces a fixed monthly amount that covers both accrued interest and a portion of the principal with each payment.
What is a good interest rate for a personal loan? +
Rates range from around 6% for borrowers with excellent credit (720+) up to 36% for poor credit. A rate below 12% is generally considered good. Rates above 20% significantly increase the total cost and should prompt you to consider alternatives such as improving your credit score before borrowing or exploring secured loan options.
Should I pay off a loan early? +
Early repayment saves all remaining interest and frees up cash flow. Before doing so, check for prepayment penalties in your loan agreement — some lenders charge 1-5% of the remaining balance. If no penalty applies, paying off high-interest loans early is almost always the right financial move, particularly if the interest rate exceeds what you would earn investing that money.
Is it better to get a shorter or longer loan term? +
Shorter terms mean higher monthly payments but far less total interest paid. Longer terms lower the monthly burden but cost significantly more over time. The right choice depends on your monthly budget. Rule of thumb: choose the shortest term where the monthly payment is comfortably under 15-20% of your monthly take-home income.

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