Loan calculator with APR and total interest
Monthly payment, total interest, APR with fees and insurance, and how principal and interest split each year.
Calculator inputs
Results
Enter your values and press “Calculate” to see the result.
| Year | Principal repaid | Interest paid | Balance |
|---|---|---|---|
| 1 | 2,596.47 | 967.75 | 12,403.53 |
| 2 | 2,784.17 | 780.05 | 9,619.36 |
| 3 | 2,985.44 | 578.78 | 6,633.93 |
| 4 | 3,201.25 | 362.96 | 3,432.67 |
| 5 | 3,432.67 | 131.54 | 0 |
See the working step by step
- Monthly payment = 297.02; with insurance = 297.02
- Total paid = 17,821.08; total cost = 2,821.08
In short
- What it calculates
- Monthly payment, total interest, APR with fees and insurance, and how principal and interest split each year.
- Formula used
Payment = P · i / (1 − (1 + i)^−n) with i = annual rate / 12 and n = years × 12- Example
- Example 1. A loan with no costs.
Loan calculator
Before signing a loan it helps to know three things: how much you will pay each month, how much extra it will cost in total, and what the real cost is once you count fees and insurance. The interest rate alone answers none of them.
Enter the amount, the interest rate and the term (and, if there are any, the arrangement fee and monthly insurance). You get the payment, the interest, the total cost, the APR and a chart showing how each year splits between principal and interest. Everything runs in your browser.
How it works
The payment on a fixed-payment (amortising) loan is set so that, with monthly interest (one twelfth of the annual rate), the principal is exactly paid off at the end of the term. Each payment includes that month’s interest on the outstanding balance and a part that repays principal.
Total interest is the sum of the payments minus the principal. If there are arrangement fees and insurance, they are added to the cost. The APR is found by looking for the equivalent annual rate that equates the money you actually receive with everything you pay, which is why it is higher than the nominal rate when there are fees or insurance.
Formula
Payment = P · i / (1 − (1 + i)^−n) with i = annual rate / 12 and n = years × 12
Total interest = payment × n − P
Total cost = interest + arrangement fee + monthly insurance × n
APR: find ρ such that P − fee = (payment + insurance) × (1 − (1 + ρ)^−n) / ρ and APR = (1 + ρ)^12 − 1
Worked example
Example 1. A loan with no costs.
$20,000 at 6% over 5 years: payment $386.66, total interest $3,199.36 and total paid $23,199.36. The APR is 6.168%, a little above the 6% nominal because interest is charged monthly.
Example 2. With an arrangement fee.
The same loan with a 1.5% fee: the payment does not change, but the total cost rises to $3,499.36 and the APR to 6.835%. A fee that looks small adds almost seven tenths of a point a year.
Example 3. A personal loan with insurance.
$9,000 at 8.9% over 3 years, with a 2% fee and $9 a month of insurance: payment $285.78 ($294.78 with insurance), total cost $1,792.04 and APR 13.167%. Against the advertised 8.9%, the real cost is over 13%.
Explanation
Payment, interest and total cost
The payment is what you pay each month. The interest is what you pay on top of the capital you borrowed. The total cost adds fees and insurance. They are three different figures: a low payment can hide a high total cost if the term is long.
APR: the figure to compare
The nominal interest rate only counts interest. The APR adds fees, costs and tied insurance, and turns them into an equivalent annual rate. That is why the APR is the measure that lets you compare different loans: for the same term, the lower APR wins.
What to check before signing
- The **term**: lengthening it lowers the payment but raises total interest.
- The arrangement, application and early-repayment **fees**.
- The **insurance** you are asked for or “recommended”: is it compulsory? Can you buy it elsewhere?
- Whether the rate is **fixed or variable**: with a variable rate, the payment may rise.
Common mistakes
- Choosing the loan with the lowest payment without looking at total cost.
- Comparing by interest rate instead of by APR.
- Forgetting fees or tied insurance.
- Not working out what you can afford: payments should not exceed about a third of your net income.
Limits of this calculator
- It assumes a constant-payment loan at a fixed rate; it does not model variable rates, payment holidays or rising payments.
- The APR is calculated with the data you enter; the official one in the contract may include other items (such as taxes).
- It does not include early-repayment fees.
- It accepts terms of up to 100 years (1,200 payments).
Notice
This is an estimate and not an offer. Always check the figure against the lender’s pre-contract information.
Frequently asked questions
How is a loan payment calculated?
With the constant-payment formula: it depends on the amount, the monthly rate (the annual rate divided by 12) and the number of payments. It is set so the principal is exactly paid off at the end.
What is the difference between the interest rate and the APR?
The nominal rate only counts interest. The APR adds fees, costs and tied insurance and expresses them as an equivalent annual rate, so it compares better.
Why is the APR higher than the rate even with no fees?
Because interest is charged monthly and compounds: a 6% nominal rate with monthly payments equals a 6.168% effective annual rate.
What is the most the payment should be?
A common rule is that all debt payments together stay under a third of your net income, but it depends on your fixed expenses and how much you save.
Is a short or long term better?
A short term raises the payment but cuts total interest a lot. A long one lowers the payment and makes the loan dearer. Choose the highest payment you can comfortably afford.
How does the arrangement fee matter?
It is paid upfront and does not show in the payment, but it makes the loan dearer and raises the APR, especially on short loans.
What changes if the loan has a variable rate?
The payment will be reviewed with the reference rate, so the result is an estimate at today’s rate. This calculator assumes a fixed rate.
Is my data sent to a server?
No. The calculation runs in your browser.
Sources and references
The formula behind this calculator is not ours. These are the sources it comes from, in APA 7 format, in case you want to go to the original or cite them in your own work.
- Directiva 2008/48/CE del Parlamento Europeo y del Consejo, de 23 de abril de 2008, relativa a los contratos de crédito al consumo. Diario Oficial de la Unión Europea, L 133, 66–92. https://eur-lex.europa.eu/legal-content/ES/TXT/?uri=CELEX:32008L0048 Defines the APR as the total cost of credit as an annual percentage.
- Brigham, E. F., & Houston, J. F. (2019). Fundamentals of financial management (15.ª ed.). Cengage Learning. The constant-payment loan formula.
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