Loan Repayment Calculator
Calculate monthly payment and total interest by loan amount, rate, and term in two repayment modes.
A simple fixed-rate calculation. Confirm fees and preferential rates with your lender.
How the monthly payment is calculated
Both modes start from the same three inputs: the principal (the amount borrowed), the term in months, and a monthly interest rate. The annual rate is divided by 12 to get the monthly rate, so a 6% annual rate becomes 0.5% per month. For an equal-payment (annuity) loan the fixed monthly amount comes from M = P x r x (1+r)^n / ((1+r)^n - 1), where P is the principal, r is the monthly rate, and n is the number of months. In every mode, interest for a given month is charged on the balance you still owe, which is exactly why paying principal down faster shrinks the interest that follows.
The two repayment modes compared
- Equal-payment (annuity): the total monthly amount is identical for the whole term. Early on most of each payment is interest and little is principal; late in the term that split reverses. It is the easiest to budget, but you pay the most total interest.
- Equal-principal: you repay the same slice of principal every month (principal divided by the number of months) plus interest on the remaining balance. The first payment is the largest and each one after it is smaller. Heavier at the start, but you clear principal faster and pay less interest overall.
- Same loan, different shape: equal-payment is a flat line, equal-principal is a downward slope. The gap in total interest between them widens as the amount, rate, or term grows.
A worked example you can check
Take a $30,000 loan at 6% annual (0.5% monthly) over 5 years, which is 60 months. In equal-payment mode the fixed payment is about $579.98 a month, so you pay roughly $34,799 in total and about $4,799 in interest. In equal-principal mode you repay $500 of principal each month; the first payment is $650 ($500 principal plus $150 interest), the last is $502.50, and total interest comes to $4,575. Choosing equal-principal here saves about $224 in interest, but your very first payment is about $70 higher. That trade-off, a heavier start in exchange for a lighter total, is the whole decision.
When and how to use it
- Comparing lenders: fix the amount and term, change only the rate, and watch how a seemingly small rate gap turns into hundreds or thousands of dollars in total interest.
- Choosing a repayment method: put both modes side by side and decide whether your budget can absorb the higher first payment of equal-principal in return for lower total interest.
- Right-sizing the term: shorten it to save interest, or lengthen it to lower the monthly payment, and read the total-interest cost of that comfort before you commit.
- Sanity-checking an offer: run your lender's stated amount, rate, and term to confirm the monthly figure they quoted is in the right ballpark.
Common mistakes and misconceptions
- Confusing monthly and annual rate: the tool expects the annual rate and divides it by 12 itself. Entering a figure that is already a monthly rate makes it divide twice and understate your real cost.
- Assuming equal-payment is cheaper because the payment is lower: a lower flat payment usually means a longer term or more total interest, not a genuinely cheaper loan.
- Reading the first equal-principal payment as if it were fixed: it is the highest payment and it falls every month, so budgeting off that single number alone is misleading.
- Forgetting that a longer term multiplies interest: cutting the monthly payment by stretching the term can more than double what you pay in interest for the same amount borrowed.
Cautions and limits
- This is a fixed-rate model. Variable or floating rates, scheduled rate resets, and promotional teaser rates are not captured.
- It excludes fees: origination fees, early-repayment penalties, loan insurance, and taxes can change the real cost meaningfully.
- It does not model a grace or interest-only period, extra lump-sum payments, or skipped months.
- Results are estimates for planning. Your lender's official schedule, rounding rules, and day-count conventions are the numbers that actually bind.
The loan amount and terms you enter are calculated only in your browser and are never sent to or stored on a server.
Read the Privacy Policy →Frequently asked questions
Which repayment mode has less total interest?
Equal-principal, in almost every case. Because you pay down principal on a fixed schedule, the balance that interest is charged on shrinks faster, so less interest accrues over the life of the loan. The catch is that its early payments are higher than the flat equal-payment amount, so it only helps you if your budget can handle the heavier start.
Why is my first equal-principal payment so much higher?
In equal-principal mode the principal slice is fixed (principal divided by the number of months), but interest is charged on the full remaining balance, which is largest at the very start. So the first payment carries the most interest and every later payment carries a little less. On a $30,000 five-year loan at 6%, the first payment is $650 and the final one is $502.50.
Do I enter the annual rate or the monthly rate?
Enter the annual rate as a percentage; the tool divides it by 12 to get the monthly rate used in the math. For example, 6% annual becomes 0.5% per month, and 4.5% becomes 0.375%. If you enter a rate that is already monthly, the tool divides it again and the payment will look far too low.
How much does a longer term really add to interest?
A lot, because interest keeps accruing on the balance for more months. On a $30,000 loan at 6%, stretching from 5 years to 10 years drops the equal-payment amount from about $580 to about $333 a month, but total interest climbs from roughly $4,800 to about $9,970, more than double for the exact same amount borrowed.
Does it account for early repayment or extra payments?
No. The calculator assumes you follow the original schedule exactly, with no lump sums, skipped months, or early payoff, and it does not apply early-repayment penalties. In real life, paying extra reduces both the balance and the future interest, so your actual interest would end up lower than what is shown here.
Is anything I type stored or sent anywhere?
No. Every calculation runs in your browser, and the amount, rate, and term never leave your device or get saved on a server. You can close the tab and nothing is retained.