Loan Interest Calculator

How to use the loan interest calculator

1. Enter amount, rate, and term — type the amount you're borrowing, the annual interest rate (%), and the loan term (months or years).
2. Choose a repayment method — pick equal payments, equal principal, or interest-only.
3. Calculate — your monthly payment, total interest, total repayment, and a period-by-period repayment schedule are shown.

Equal Payments (Amortizing)

Your monthly payment (principal + interest) stays the same for the entire loan term. Early on, more of each payment goes toward interest and less toward principal; over time the principal share grows. Because the payment is fixed, it's easier to plan your budget.

Equal Principal

The principal portion of each payment stays the same, while the interest is calculated on the remaining balance — so your payment shrinks over time. Payments start higher, but total interest is the lowest of the three methods.

Interest-Only (Bullet)

You pay only interest each month during the loan term, then repay the entire principal in one lump sum at maturity. Monthly payments are the lowest, but total interest is the highest of the three methods.

Which repayment method should I choose?

If your goal is to reduce total interest, equal principal is the better choice; if you want to manage a consistent monthly amount, equal payments is better. Interest-only has the lowest monthly burden but the highest total interest, so it's mainly chosen for short-term funds or when you plan to repay before maturity.

How is the annual interest rate applied?

The annual rate is divided by 12 to get a monthly rate, which is applied to the remaining principal each month. As the principal decreases, the interest decreases too. This calculator uses loan-repayment logic (interest on the outstanding balance), not deposit-style compound interest.

Calculation rules and example

The formula below gives the equal monthly payment A. P is principal, r is annual interest rate ÷ 100 ÷ 12, and n is the total number of monthly payments. At zero interest, A=P/n.

A = P × r × (1+r)n / ((1+r)n − 1)

Assumes a fixed rate, equal monthly intervals and payments at month end. Daily interest, rate changes, payment holidays and fees are excluded. Internal values stay unrounded; displayed amounts are rounded to whole currency units, so displayed rows may not add up to the displayed total. The final payment settles the remaining principal.

Checkable example: principal 1,200,000, annual rate 12%, 12 months, equal payments: first monthly payment 106,619, total repayment 1,279,423, total interest 79,423. These are example inputs, not a product rate or quote.

Sources and references

• OpenStax — Loan payments