Financial · Live
What your loan
actually costs to repay.
Enter a loan amount, interest rate, and term to see your monthly payment, full amortization schedule, and a side-by-side term comparison, so you can choose the repayment period that best balances monthly affordability against total interest paid.
Inputs
Loan details
- Monthly payment
- $300.57
- Total cost
- $18,034
- Payoff date
- May 2031
Monthly payment
5 yr · 7.5% APR
Fixed-rate · fully amortising · payoff by May 2031
Interest
16.8%
Breakdown
Principal vs interest per year
Compare
How term length changes the cost
| Term | Monthly | Total cost |
|---|---|---|
| 1 yr | $1,301.36 | $15,616 |
| 2 yr | $674.99 | $16,200 |
| 3 yr | $466.59 | $16,797 |
| 5 yrcurrent | $300.57 | $18,034 |
| 7 yr | $230.07 | $19,326 |
| 10 yr | $178.05 | $21,366 |
Schedule
Year-by-year summary
| Year | Principal | Interest | End balance |
|---|---|---|---|
| Year 1 | $2,569 | $1,038 | $12,431 |
| Year 2 | $2,768 | $838 | $9,663 |
| Year 3 | $2,983 | $624 | $6,679 |
| Year 4 | $3,215 | $392 | $3,464 |
| Year 5 | $3,464 | $142 | $0 |
Amortization
Month-by-month schedule
| Month | Payment | Principal | Interest |
|---|---|---|---|
| 1 | $300.57 | $206.82 | $93.75 |
| 2 | $300.57 | $208.11 | $92.46 |
| 3 | $300.57 | $209.41 | $91.16 |
| 4 | $300.57 | $210.72 | $89.85 |
| 5 | $300.57 | $212.04 | $88.53 |
| 6 | $300.57 | $213.36 | $87.21 |
| 7 | $300.57 | $214.70 | $85.87 |
| 8 | $300.57 | $216.04 | $84.53 |
| 9 | $300.57 | $217.39 | $83.18 |
| 10 | $300.57 | $218.75 | $81.82 |
| 11 | $300.57 | $220.12 | $80.45 |
| 12 | $300.57 | $221.49 | $79.08 |
| 13 | $300.57 | $222.88 | $77.69 |
| 14 | $300.57 | $224.27 | $76.30 |
| 15 | $300.57 | $225.67 | $74.90 |
| 16 | $300.57 | $227.08 | $73.49 |
| 17 | $300.57 | $228.50 | $72.07 |
| 18 | $300.57 | $229.93 | $70.64 |
| 19 | $300.57 | $231.37 | $69.20 |
| 20 | $300.57 | $232.81 | $67.76 |
| 21 | $300.57 | $234.27 | $66.30 |
| 22 | $300.57 | $235.73 | $64.84 |
| 23 | $300.57 | $237.20 | $63.37 |
| 24 | $300.57 | $238.69 | $61.88 |
Field guide
How a loan repayment is calculated.
A standard loan repayment. Also, called a fully amortising or instalment loan — is built on one simple idea: every monthly payment covers the interest that accrued since the last payment, with the remainder reducing the outstanding balance. When you make your final payment, the balance reaches exactly zero. The formula that produces a constant payment achieving this is:
M = P × r × (1 + r)n / ((1 + r)n − 1)
- M = monthly payment
- P = principal (amount borrowed)
- r = monthly interest rate (APR ÷ 12)
- n = number of monthly payments (term in months)
Because every payment is the same size but each month's interest charge shrinks as the balance falls, the split between principal and interest shifts with every payment. In month one, most of the payment covers interest; by the final month, nearly all of it reduces principal. This is called front-loaded interest, and it is why early payments feel like they barely touch the balance.
The true cost of a longer term
Extending the term lowers the monthly payment but dramatically increases the total interest you pay. Take a $15,000 loan at 7.5%:
| Term | Monthly | Total interest | Total cost |
|---|---|---|---|
| 1 year | $1,302 | $424 | $15,424 |
| 3 years | $464 | $1,704 | $16,704 |
| 5 years | $300 | $3,028 | $18,028 |
| 7 years | $228 | $4,152 | $19,152 |
| 10 years | $178 | $6,360 | $21,360 |
Choosing a 10-year term instead of a 3-year term saves $286 every month: but costs an extra $4,656 in interest over the life of the loan. The term-comparison table in this calculator makes that trade-off visible at a glance for any amount and rate you enter.
How the amortization schedule works
Each row in the month-by-month schedule below the calculator follows the same logic:
- Interest charge. Multiply the opening balance by the monthly rate (APR ÷ 12). A $15,000 balance at 7.5% APR accrues $93.75 in the first month.
- Principal reduction. The remainder of the fixed payment, $300.46 − $93.75 = $206.71, reduces the balance.
- New balance. $15,000 − $206.71 = $14,793.29. Next month's interest charge will be slightly lower.
Repeat this 60 times for a 5-year loan and the balance reaches exactly zero on the last payment. The schedule is completely deterministic once the three inputs are fixed. There are no surprises, no variable fees, and no hidden costs in a standard fixed-rate instalment loan.
APR vs nominal rate vs effective rate
The Annual Percentage Rate (APR) is the rate you enter in this calculator. For a simple instalment loan with no fees, APR equals the nominal annual rate. Many lenders quote a nominal rate compounded monthly, which also equals the APR in this context.
The effective annual rate (EAR) is slightly higher because it accounts for the compounding effect of monthly interest: EAR = (1 + APR/12)12 − 1. At 7.5% APR, the EAR is approximately 7.76%. For instalment loans this distinction rarely matters to borrowers, since the payment schedule is what drives the decision, not the theoretical annual accumulation.
Fixed-rate vs variable-rate repayments
This calculator models a fixed-rate loan: the interest rate and therefore the monthly payment never change over the life of the loan. Variable-rate loans (also called adjustable or floating-rate loans) tie the rate to a benchmark, such as the SOFR or the Bank of England base rate, so payments can rise or fall at each adjustment period. Fixed-rate loans offer certainty; variable-rate loans often start lower but carry rate risk.
What the interest share tells you
The donut chart in this calculator shows the interest share: how many cents of every dollar you repay go to the lender rather than to reducing your debt. A 5-year $15,000 loan at 7.5% has a 16.8% interest share — you pay back $1.17 for every $1.00 borrowed. At 10 years, the share rises to 29.8%. For long-term mortgages at higher rates, it can exceed 50%, meaning more than half of every payment is pure interest cost.
How to reduce total interest paid
There are three ways to lower the total interest on a fixed-rate instalment loan:
- Negotiate a lower rate. Even a 1% reduction has a measurable impact over a long term. Good credit scores, secured collateral, and competitive comparison shopping all help.
- Choose a shorter term. The term-comparison table shows exactly how much each year shaved off the term saves in interest. Even moving from 5 years to 4 years can save hundreds of dollars.
- Make extra principal payments. Any amount paid above the scheduled monthly payment goes directly to the balance, cutting both the remaining term and future interest charges. Use the Loan Calculator to model the exact interest savings from extra monthly contributions.
Secured vs unsecured loans
A secured loan is backed by collateral — a car in an auto loan, a house in a mortgage, so the lender can repossess the asset if you default. Secured loans typically carry lower interest rates because the lender's risk is lower. An unsecured loan, such as a personal loan or credit card, has no collateral; the lender relies solely on your creditworthiness. Unsecured rates are generally 2–5 percentage points higher for the same borrower profile.