Is this an amortized monthly repayment formula?
Yes. The calculation uses a standard fixed-payment amortization formula for monthly repayment estimates.
Finance
Loan Calculator
Enter the loan amount, interest rate, and repayment term to see your estimated monthly payment and total cost over the life of the loan.
Live calculator output
Enter principal, interest rate, and term to see the repayment estimate.
How it works
This calculator uses the standard 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 monthly payments.
The total cost is the monthly payment multiplied by the number of months. Total interest is the total cost minus the principal. This is the same formula banks use for personal loans, auto loans, and student loans.
Practical example
Borrowing 25,000 at 6.5% annual interest for 60 months gives a monthly payment of about 489.
Over the full term you pay 29,351 total, of which 4,351 is interest. Shortening the term to 36 months raises the payment to 766 but reduces total interest to only 2,573.
Frequently asked questions
Can I estimate a zero-interest loan?
Yes. Set the annual interest rate to 0 and payments are spread evenly across the term.
Does this include fees or insurance?
No. This estimate includes principal and interest only.
What is APR vs interest rate?
APR includes fees and other costs in addition to interest. This calculator uses a simple interest rate. Your actual APR from a lender may be slightly higher.
Can I use this for a car loan?
Yes. Enter the financed amount (after any down payment), the dealer's interest rate, and the term in months.
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