Loan Calculator
Enter the amount, interest rate and term to compare three repayment methods side by side and see a month-by-month amortization schedule. Works for mortgages, car loans and personal loans in any currency.
Enter the loan amount, rate and term, then press Calculate.
| Method | 1st payment | After interest-only | Total interest | Total paid |
|---|
Show the amortization schedule
| Month | Payment | Principal | Interest | Balance |
|---|
Three ways to repay a loan
| Method | Monthly payment | Total interest | Typical use |
|---|---|---|---|
| Amortized (fixed payment) | The same every month; the interest share shrinks and the principal share grows over time | Medium | Most mortgages, car loans and personal loans |
| Equal principal | The same principal each month plus interest on the balance, so payments start high and fall | Lowest | Borrowers who can afford higher early payments; common in some countries’ mortgages and business loans |
| Interest-only (balloon) | Interest only, then the whole principal in the final month | Highest | Short-term, bridge or investment loans where the principal is repaid from a sale or refinance |
Interest-only period (grace period): some loans start with months where you pay only interest. The principal is then repaid over the remaining months, so later payments are higher and total interest increases. This calculator includes the interest-only months in the loan term, so a 30-year loan with 12 interest-only months repays its principal over 29 years.
The formulas
With a monthly rate r = annual rate ÷ 12 and n repayment months (excluding any interest-only months):
- Amortized: payment = P × r × (1 + r)n ÷ ((1 + r)n − 1). Each month, interest = balance × r and the rest of the payment reduces the balance.
- Equal principal: principal per month = P ÷ n, interest = balance × r. Total interest = P × r × (n + 1) ÷ 2.
- Interest-only: interest each month = P × r, and P is repaid in the last month. Total interest = P × r × term in months.
Example: 300,000 at 6% for 30 years
An amortized loan costs 1,798.65 a month and about 347,515 in total interest. Equal principal starts at 2,333.33 and falls to about 838.70, with about 270,751 in interest. Interest-only costs 1,500 a month and 540,000 in interest, plus the 300,000 balloon payment at the end. The same rate can mean a difference of more than 250,000 in interest depending on how you repay.
Why you pay so much interest early on
In the example above, the first amortized payment is 1,500.00 interest and only 298.65 principal. Because interest is charged on the remaining balance, extra payments early in the loan save the most interest. Open the schedule to see when principal overtakes interest.
Frequently asked questions
Which currency does it use?
None in particular. Enter amounts in your own currency (dollars, euros, pounds, rupees …) and read the results in the same currency. Amounts are calculated to two decimal places, with each month’s interest rounded to the nearest cent.
Why is my lender’s figure slightly different?
This calculator uses the annual rate ÷ 12 every month. Lenders may use daily interest (actual days ÷ 365 or 360), round differently, or include fees, insurance, escrow for property taxes, or mortgage insurance in the payment. APR as advertised can also include fees, while the payment formula uses the note rate.
What about variable-rate (ARM) loans?
The result assumes the rate never changes. For an adjustable-rate loan, run it again with the rate you expect after each reset to see the range of payments.
Does paying early reduce interest?
Yes, extra principal payments cut the interest on the remaining balance, but check for prepayment penalties. Results are estimates for planning; confirm the actual terms with your lender. Saving instead of borrowing? Try the savings interest calculator.