How to Use This Loan Calculator
Enter your loan amount, the annual interest rate your lender quoted you, and the term of the loan in years. The calculator instantly shows your monthly repayment, the total interest you'll pay over the life of the loan, and a full month-by-month amortisation schedule.
Loan Amount
The total amount you're borrowing — not including any fees or insurance your lender may add on top.
Interest Rate
Use the Annual Percentage Rate (APR) if given. This includes the base rate and gives a truer cost of the loan.
Loan Term
Longer terms mean smaller monthly payments but significantly more interest paid overall. The difference can be thousands of dollars.
Amortisation
In early months, most of your payment goes to interest. As the balance falls, more goes to principal. This is called amortisation.
The Formula Behind the Calculator
Standard loan repayments are calculated using the amortisation formula below. Every lender uses this same formula:
M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1]
M = monthly payment
P = principal (loan amount)
r = monthly interest rate (annual rate ÷ 12)
n = total number of payments (years × 12)
7 Facts That Will Change How You Think About Loans
1. Small rate changes are enormous over time. On a $300,000 mortgage over 30 years, the difference between a 6.5% and 7.5% rate is over $62,000 in extra interest — more than some people's annual salaries.
2. Making one extra payment per year on a 30-year mortgage can cut 4–6 years off the term. This works because every extra dollar reduces the principal, which reduces the interest calculated the following month — a compounding effect in reverse.
3. The first payment is the most expensive. Because interest is charged on the outstanding balance, your first payment carries the highest interest component of any payment you'll ever make. By your final payment, almost all of it is principal.
4. Personal loan rates vary wildly. In 2025, personal loan APRs ranged from under 7% for borrowers with excellent credit to over 36% for those with poor credit. A $10,000 personal loan at 36% over 3 years costs nearly $7,000 in interest — more than 2× the same loan at 7%.
5. Auto loans depreciate faster than they're repaid. In the first year of a 60-month auto loan, you often owe more than the car is worth — a phenomenon called being "underwater" or "upside down." Gap insurance exists specifically to cover this difference.
6. Student loan interest can capitalise. If you don't pay interest while in school, it's added to your principal when repayment begins — meaning you pay interest on interest. A $30,000 student loan at 6% accrues $1,800/year in interest before you've made a single payment.
7. Bi-weekly payments are a legal hack. Instead of 12 monthly payments, making 26 bi-weekly half-payments gives you 13 full payments per year. On a 30-year mortgage, this alone can shave off over 5 years and save tens of thousands in interest.
Understanding Your Amortisation Schedule
The amortisation table shows every single payment you'll make. Notice how in the early months, the "interest" column is large and the "principal" column is small. As months pass, this flips — your payment stays the same, but more of it chips away at the actual debt. This is why paying extra early in a loan has an outsized effect: you're reducing the balance that interest is calculated on for every remaining month.