Loan repayment and total interest calculator
Estimate monthly loan payments, total interest, and total cost.
This calculates the monthly payment on an amortising loan from the amount, annual interest rate and term, using the standard amortisation formula. Everything runs in your browser, so the figures you enter are never transmitted. The result is the arithmetic of the loan as specified — it is not a quote, and it does not include fees a lender may add. The formula is M = P × r(1+r)^n / ((1+r)^n − 1), where r is the annual rate divided by twelve and n is the term in months. On $20,000 over five years at 7 percent, that gives about $396 a month and roughly $3,761 in total interest. Because interest is charged on the outstanding balance, early payments are mostly interest and later ones mostly principal. Origination fees, insurance and any early-repayment penalty sit outside this calculation, so the APR a lender advertises is usually a little higher than the rate entered here.
About the Loan Calculator
Work out exactly what a loan will cost you before you sign. Enter the amount, annual interest rate, and term in years to instantly see your monthly payment, the total interest you'll pay, and the total amount repaid over the life of the loan. Everything runs in your browser — your numbers never leave your device.
How to use the Loan Calculator
- 01Enter the loan amount you want to borrow.
- 02Type the annual interest rate (APR) as a percentage.
- 03Set the loan term in years.
- 04Read your monthly payment, total interest, and total repayment instantly.
Why use our Loan Calculator
- 01
Accurate amortization
Uses the standard amortization formula banks and lenders use.
- 02
Handles 0% loans
Interest-free loans are calculated correctly as a simple split of the principal.
- 03
Instant updates
Results recalculate as you type — no buttons to click.
- 04
100% private
Your financial details stay on your device. Nothing is uploaded or stored.
How is a monthly loan payment calculated?
The monthly payment is given by P = L × [r(1+r)^n] / [(1+r)^n − 1], where L is the loan amount, r is the monthly interest rate (the annual rate divided by twelve) and n is the total number of monthly payments. The formula solves for the fixed payment that reduces the balance to exactly zero after n payments while charging interest each month on the balance remaining. What that produces is the characteristic amortisation curve: early payments are mostly interest because the balance is large, and the proportion going to principal grows steadily as the balance falls. On a five-year loan the crossover comes early, but on a long term the early years contribute remarkably little to the principal — which is the single most counter-intuitive fact about borrowing and the reason total interest is so sensitive to term length.
Why term length matters more than most people expect
Extending a loan term lowers the monthly payment, which is why lenders offer it and why it is tempting. The cost is not proportional. Because interest accrues on the outstanding balance every month, a longer term means more months of interest on a balance that is falling more slowly, so total interest rises faster than the term does. A £20,000 loan at 7 percent costs about £3,761 in interest over five years and about £7,871 over ten — the term doubled and the interest more than doubled, while the monthly payment fell by only around 32 percent. The practical consequence is that comparing loans by monthly payment alone is misleading, and the figure that tells you what a loan actually costs is the total interest over its life. Where a lower payment is genuinely necessary for affordability that is a legitimate trade, but it should be made knowingly.
What this calculation deliberately leaves out
Several real costs sit outside the amortisation formula and will make an actual loan differ from this figure. Arrangement, origination and documentation fees are often charged upfront or added to the balance. Payment protection insurance, where sold, adds to the monthly cost. Early repayment charges can apply if you clear the balance ahead of schedule, which matters if you intend to overpay. Late payment fees and default interest rates apply if a payment is missed. This is also why the annual percentage rate, APR, exists: it folds compulsory fees into a single comparable figure, and comparing two loans by APR is more meaningful than comparing them by headline interest rate. Two further limitations: this assumes a fixed rate, so a variable-rate loan will diverge as the rate moves, and it assumes payments are made exactly on schedule. Nothing here constitutes financial advice — for a decision that matters, speak to a qualified adviser.
How term length changes the cost of a £20,000 loan at 7%
| Term | Monthly payment | Total interest | Total repaid |
|---|---|---|---|
| 3 years | £617.54 | £2,231 | £22,231 |
| 5 years | £396.02 | £3,761 | £23,761 |
| 7 years | £301.77 | £5,349 | £25,349 |
| 10 years | £232.22 | £7,867 | £27,867 |
Doubling the term from five to ten years cuts the payment by 41% but more than doubles the interest.
Frequently asked questions
How is the monthly payment calculated?
With the standard amortisation formula P = L × [r(1+r)^n] / [(1+r)^n − 1], where r is the monthly rate and n the number of payments. It finds the fixed payment that clears the balance in exactly n months.
Why is so much of my early payment interest?
Interest is charged on the outstanding balance, which is largest at the start. As the balance falls the interest portion shrinks and the principal portion grows.
Does a longer term cost more?
Substantially. A £20,000 loan at 7% costs about £3,761 in interest over five years and £7,867 over ten — the payment falls 41% while the interest more than doubles.
Does this include fees?
No. Arrangement fees, insurance and early repayment charges sit outside the formula. Compare loans by APR, which folds compulsory fees into one figure.
What if my rate is variable?
This assumes a fixed rate throughout. A variable-rate loan will diverge from these figures as the rate changes, so treat the result as a snapshot at the current rate.
Does overpaying save money?
Usually a great deal, because it reduces the balance that interest is charged on for every remaining month. Check whether your agreement has early repayment charges first.
Is my financial data uploaded?
No. All arithmetic runs in your browser and nothing you enter is transmitted, logged or stored.
Why does my lender quote a different payment?
Lenders may add fees to the balance, round differently, or use a slightly different day-count convention. Treat this as an accurate model of the stated terms, not a quote.
Is this financial advice?
No. It is arithmetic. For a borrowing decision that matters, speak to a qualified financial adviser.
Last updated
Uses the standard fixed-rate amortisation formula. APR definitions follow the UK Consumer Credit (Total Charge for Credit) Regulations and the US Truth in Lending Act (Regulation Z). Not financial advice.