Loan Calculator

Work out what a loan really costs: the monthly payment, the total interest and how the debt melts away year by year. Enter the amount, the interest rate and the term, or turn it around and see how much loan a monthly budget can carry. Below the calculator you can read how annuity loans work, where interest comes from and which mistakes make credit expensive.

Monthly payment

A loan of at % interest, paid off over years

Monthly payment –

Total interest –

Total repaid –

What can I afford?

A monthly payment of at % interest over years

Possible loan amount –

Repayment over time

Enter amount, rate and term to see the payment.

Typical loans and what they cost

Five common loans and what they cost per month and in total, calculated with the annuity formula above.

Loan	Amount	Interest	Term	Monthly	Total interest
Small consumer loan	5,000	8.9%	3 years	158.77	716
Used car	15,000	6.5%	5 years	293.49	2,610
New car	30,000	5.9%	6 years	495.77	5,696
Mortgage	200,000	3.8%	25 years	1,033.71	110,114
Mortgage, long term	300,000	4.2%	30 years	1,467.05	228,139

How an annuity loan works

Nearly every consumer loan and mortgage is an annuity: you pay the same amount every month, the bank first takes the interest due on the remaining debt, and the rest of the payment repays the loan itself. Because the debt shrinks a little every month, the interest share falls and the repayment share grows, slowly at first, then faster.

The payment comes from one formula: payment = loan × i ÷ (1 - (1 + i)^-n), where i is the monthly interest rate (annual rate divided by 12) and n the number of monthly payments. At 0% interest it is simply the loan divided by the number of months. The calculator above does nothing else.

This is also why the early years of a mortgage feel unproductive: on a fresh 200,000 loan at 4%, the first month contains about 667 in interest (200,000 × 4% ÷ 12). With a 30 year payment of 955, only 288 of the first installment actually reduce the debt. Twenty years later, the same 955 is mostly repayment.

Where interest and credit come from

Credit is far older than coined money. In Mesopotamia, farmers borrowed seed grain and repaid after the harvest, and the Code of Hammurabi, around 1750 BC, already capped interest: a third for grain loans and 20 percent for silver, with drastic penalties for lenders who charged more. Kings occasionally wiped the slate clean with royal debt cancellations.

For centuries, lending at interest was fought on moral grounds: ancient philosophers condemned it and the medieval church banned usury among Christians, which pushed lending to the margins of society. Renaissance banking houses worked around the ban with fees and exchange rates, and step by step interest became an accepted price for time and risk.

The words carry that history: credit comes from the Latin credere, to trust. The annuity, one constant payment covering interest and repayment together, made borrowing predictable and is the standard form of consumer and mortgage credit today.

Nominal rate, APR, remaining debt

The nominal rate is the pure price of the borrowed money. The effective annual rate, the APR, also folds the loan's mandatory costs and the payment schedule into one percentage. In the EU, lenders must state this APR for consumer credit (Directive 2008/48/EC), precisely so that offers can be compared with a single number.

Compare loans only by APR, never by nominal rate or monthly payment. A lower payment often just means a longer term, and a low nominal rate can hide fees that the APR would reveal.

Two more terms worth knowing: the remaining debt is what you still owe at any point in time, and the amortization schedule shows how it melts away. Extra repayments shorten the loan and cut total interest, if the contract allows them without a prepayment penalty.

Common mistakes

Comparing the nominal rate instead of the APR: fees can make the cheap looking offer the expensive one. The APR exists precisely to prevent this.
Choosing the longest term for the smallest payment: on 200,000 at 4%, thirty years cost roughly twice as much interest as fifteen years.
Treating 0% financing as free money: the credit cost is often already in the price of the goods, and missed payments can trigger steep default terms. Read the contract, not the banner.
Ignoring the amortization schedule: in the early years an annuity is mostly interest. Anyone who sells or refinances after five years has repaid far less than it feels like.

Rules of thumb

The first month's interest is loan × annual rate ÷ 12. Your payment must be clearly above that number, or the debt barely moves.
Per 100,000 borrowed, one percentage point more interest costs about 83 per month at the start (100,000 × 1% ÷ 12).
Rule of 72: 72 divided by the interest rate is roughly the number of years for a debt to double when nothing is repaid. At 6 percent, that is about twelve years.
Halving the term does not double the payment: on 200,000 at 4 percent, 30 years cost 955 per month, 15 years cost 1,479. That is about 55 percent more per month, while total interest falls by more than half.

Frequently asked questions

What is the difference between the nominal rate and the APR?

The nominal rate prices only the borrowed money. The APR adds all mandatory costs and the payment schedule into one comparable percentage. EU law requires lenders to disclose it for consumer credit, so it is the number to compare.

Why does so little principal get repaid at the beginning?

Interest is always charged on the remaining debt. At the start the debt is at its largest, so most of the constant payment is eaten by interest. As the balance falls, the same payment repays more and more.

Do extra repayments really help?

Yes, twice over: they cut the balance immediately, and every following month then charges interest on a smaller debt. Early extra repayments have the biggest effect. Check whether your contract allows them without a prepayment penalty.

Is 0% financing really interest free?

Sometimes, for short terms at regular prices. But often the credit cost is baked into the price, and late payments can trigger steep default terms. Compare the total you pay against the cash price, not the advertised rate.