TheFreeTool

Loan Calculator

Enter how much you want to borrow, the yearly interest rate and how long you will take to repay it. You will see the monthly payment and what the loan costs in total.

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Good to know

This is an estimate for general information. It is not tax, legal or financial advice. Your payslip can differ because of tax codes, credits, local taxes, benefits and your employer's rules. Check official guidance or ask a qualified adviser.

What it does

  • Monthly payment for a fixed-rate loan
  • Total interest and total repaid
  • Works for personal, student and business loans
  • Any currency from the currency menu

How to use it

  1. Enter the loan amount.
  2. Enter the yearly interest rate and the term in years.
  3. Read the monthly payment, total interest and total repaid.

How is a loan payment worked out?

A standard loan is repaid in equal monthly payments. Each payment covers that month's interest first, and the rest reduces what you owe. Early on most of the payment is interest. Later most of it pays down the loan.

The payment depends on the amount, the monthly interest rate (the yearly rate divided by 12) and the number of months. A longer term gives a smaller payment but more interest in total. Fees, insurance and variable rates are not included.

Example

A $25,000 loan at 7.5% over 5 years has a monthly payment of about $500.95. Over 60 months you repay about $30,057, so the interest is about $5,057.

Questions people ask

Does this work for any loan?
It works for loans with a fixed rate and equal monthly payments, such as many personal, car and student loans.
Why is total interest so high on a long loan?
Interest is charged on the balance for longer. A shorter term costs less interest in total, even though the payment is higher.
Are fees included?
No. Add any arrangement fees or insurance yourself, and check the lender's own figures.

Disclaimer

This tool is for general information only. It is not financial, tax, investment or legal advice, and results are estimates that may differ from your bank, lender or tax authority. Rates, limits and tax rules change. Bank and brand names are used only to describe what the tool does; they belong to their owners and we are not affiliated with them. Check the figures with a qualified professional or your provider before you decide. You use this tool at your own risk, and TheFreeTool is not liable for any loss that follows. Read the full disclaimer

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