Loan Calculator
Estimate your monthly payments and total loan cost.
Loan Summary
Understanding Your Loan with Our Calculator
Taking out a loan is a significant financial decision. Whether it's for a new car, a home renovation, debt consolidation, or personal expenses, understanding the true cost and repayment structure is crucial. Our Loan Calculator helps you demystify the numbers by providing clear estimates of your monthly payments and the total interest you'll pay over the life of the loan.
How Loan Payments Are Calculated
Most standard loans (like personal loans or auto loans) use an amortization formula to calculate a fixed monthly payment. This payment consists of two parts:
- Principal: The portion of the payment that goes towards reducing the original amount you borrowed.
- Interest: The cost of borrowing the money, calculated as a percentage of the outstanding loan balance.
In the beginning of the loan term, a larger portion of your payment goes towards interest. As you pay down the principal balance, the interest portion decreases, and more of your payment goes towards the principal. Our calculator uses this standard formula to determine your fixed monthly payment.
Key Loan Terms Explained
- Loan Amount: The total amount of money you are borrowing (the principal).
- Annual Interest Rate (%): The yearly percentage charged by the lender for borrowing the money. This calculator converts the annual rate to a monthly rate for calculations.
- Loan Term: The length of time you have to repay the loan, usually expressed in years or months. A longer term typically means lower monthly payments but higher total interest paid. A shorter term results in higher monthly payments but less interest paid overall.
- Monthly Payment: The fixed amount you will pay each month towards principal and interest.
- Total Interest Paid: The total amount of interest you will pay over the entire loan term. This represents the true cost of borrowing.
- Total Cost of Loan: The sum of the total principal paid (the original loan amount) and the total interest paid.
Using the Loan Calculator
Simply enter your desired Loan Amount, the Annual Interest Rate offered by the lender, and the Loan Term (specify whether it's in years or months). Select your preferred Currency. Click "Calculate" to see a breakdown of your estimated monthly payment, total principal, total interest, and the total cost of the loan. You can adjust the values and recalculate to compare different loan scenarios. Use the "Download Results" button to save a text summary of your calculation.