How to use the Loan Calculator
- Enter the amount you will borrow.
- Enter the annual interest rate from your offer letter.
- Enter the term in years (decimals are fine: 2.5 = 30 months).
- Press Calculate to see the payment and the year-by-year schedule.
Formula
Payment = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
where P is the amount borrowed, r is the monthly rate (annual rate ÷ 12 ÷ 100) and n is the number of monthly payments. Each month, interest is charged on the remaining balance and the rest of the payment reduces the balance.
Examples
- 25,000 at 9.5% for 5 years: payment ≈ 525.05 a month, total interest ≈ 6,503.
- Same loan over 3 years: payment ≈ 800.82, total interest ≈ 3,830. A shorter term costs more each month but less overall.
Frequently asked questions
Is the interest rate the same as APR?
Not always. APR includes some fees spread over the term. Enter the nominal rate here and add fees in the optional field to see the total cost.
How can I reduce the interest I pay?
Borrow less, choose a shorter term, or make extra payments early, when the balance and the interest charged on it are highest.