Loan Calculator
Calculate your General loan payment in seconds with the free Loan Calculator. No registration needed.
Loan details
Your payment
What is a Loan Calculator?
A Loan Calculator estimates your monthly loan payment based on the loan amount, interest rate (APR), and term. It works for any type of loan — personal, debt consolidation, home improvement, or business — giving you a clear picture of what you will pay each month.
How to calculate loan payment manually (the formula)
The standard formula is: M = P [ r(1+r)n ] / [ (1+r)n – 1 ] where M is the monthly payment, P is the principal (loan amount), r is the monthly interest rate (APR ÷ 12), and n is the total number of monthly payments (term in years × 12).
Example calculation
For a $20,000 loan at 8.5% APR over 5 years: the monthly rate is 0.7083% (8.5% ÷ 12). Over 60 payments, the monthly payment is about $410. The total interest paid over the life of the loan is approximately $4,620, making the total cost $24,620.
Common mistakes
- Focusing only on the monthly payment — A longer term lowers the monthly payment but increases total interest. Always check the total cost.
- Ignoring fees in the APR — APR includes lender fees. Comparing APR instead of the interest rate gives you a fairer comparison between offers.
- Not checking prepayment penalties — Some loans charge a fee for paying off early, which can cancel out the interest savings.
- Confusing APR with the interest rate — APR is broader and includes fees. The interest rate is just the cost of borrowing the principal.
- Forgetting about variable rates — Some loans have variable rates that can increase over time, raising your monthly payment unexpectedly.
Frequently asked questions
How does a loan calculator work?
A loan calculator uses the loan amount, interest rate, and term to calculate your monthly payment. It applies the standard amortisation formula to divide the loan plus interest into equal payments over the loan term.
What is APR and why does it matter?
APR (Annual Percentage Rate) includes the interest rate plus any fees the lender charges. It gives you a more complete picture of what the loan actually costs compared to the interest rate alone.
Can I pay off my loan early?
Many lenders allow early repayment, but some charge prepayment penalties. Paying off a loan early saves on interest, so check your loan terms before making extra payments.
What is the difference between secured and unsecured loans?
A secured loan uses an asset (like a car or home) as collateral and typically has lower rates. An unsecured loan does not require collateral but usually has higher interest rates.
Is this calculator free to use?
Yes, completely free with no sign-up or download required. You can use it as many times as you like.