Interest depends on three things: the amount, the rate and the time. Halving the term of an amortizing loan more than halves the interest because the balance falls faster.
How to use the Loan Interest Calculator
- Loan type
- Loan amount
- Interest rate
- Loan term
Results update as you type, and every field accepts the units shown in its menu.
How it works
Choose the loan type, enter the amount, interest rate and term.
Tips
- Compare loans by APR and total cost, not just the monthly payment.
- Extra payments go straight to principal and can save a lot of interest.
- Pay off the highest-rate debt first if you want to save the most money.
- Check for prepayment penalties before paying a loan off early.
Common mistakes to avoid
- Stretching a loan term to lower the payment without seeing the extra interest.
- Paying only the minimum on credit cards.
- Forgetting fees that are rolled into the loan.
Inputs explained
| Field | What to enter |
|---|---|
| Loan type | Choose one: Amortizing (equal monthly payments), Simple interest, repaid at the end |
| Loan amount | Amount in your currency |
| Interest rate | In % |
| Loan term | Units: years, months |
What each result means
- Total repaid = [Loan amount] + [Total interest]
- Interest as a share of the loan = [Total interest]÷[Loan amount]×100
- Interest in the first month = [Loan amount]×[Interest rate]÷1200
Example values
How the main result changes when Loan amount changes and everything else stays at the example values above:
| Loan amount | Total interest |
|---|---|
| 5,000 | 723.95 |
| 7,500 | 1,085.93 |
| 10,000 | 1,447.9 |
| 12,500 | 1,809.88 |
| 15,000 | 2,171.86 |
| 20,000 | 2,895.81 |
Formula
Amortizing: payment = pmt(i, n, L), interest = payment × n − LSimple interest (repaid at the end): interest = L × r × yearsWorked example
Inputs — Loan type: Amortizing (equal monthly payments); Loan amount: $10,000; Interest rate: 9 %; Loan term: 3 years.
Results — Monthly payment = $318.00; Total interest = $1,447.90; Total repaid = $11,447.90; Interest as a share of the loan = 14.48 %; Interest in the first month = $75.00.
Frequently asked questions
How do I calculate loan interest?
For equal payments: payment × months − loan amount.
What's the difference between simple and amortizing interest?
Amortizing interest falls as you repay; simple interest is on the full amount.
How can I pay less interest?
Borrow less, get a lower rate, choose a shorter term or pay extra.
What formula does the Loan Interest Calculator use?
Amortizing: payment = pmt(i, n, L), interest = payment × n − L.