Loan Repayment Calculator: Payments and Interest

A loan repayment calculator estimates the fixed monthly payment and total interest for a loan using its principal, annual percentage rate (APR), and term. Enter those three figures to see the scheduled payment and the interest cost implied by the calculator’s assumptions.

Formula

The calculator uses the standard fixed-payment amortizing-loan formula. First, it converts the annual APR to a monthly rate, then calculates the payment that pays down the balance over the stated number of months:

Monthly payment = round(P × r / [1 − (1 + r)⁻ⁿ], 2)

Total interest = monthly payment × n − P

• P is the amount borrowed, in dollars.
• APR is the annual percentage rate entered as a percentage, such as 8 for 8% per year.
• r is the monthly rate, calculated as APR ÷ 1,200.
• n is the number of monthly payments, calculated as loan term in years × 12.
• Round rounds the scheduled payment to the nearest cent. The total-interest result uses that rounded payment.

The formula assumes equal monthly payments and a rate that remains fixed throughout the term. It is not a quote and does not model a lender’s specific payment schedule or charges.

Worked Example

Using the calculator’s defaults: P = $20,000, APR = 8%, and a five-year term.

1. Convert the APR to a monthly rate: r = 8 ÷ 1,200 = 0.0066667, or about 0.66667% per month.
2. Convert the term to months: n = 5 × 12 = 60.
3. Substitute the values: payment = round[20,000 × 0.0066667 ÷ (1 − (1.0066667)⁻⁶⁰), 2].
4. The monthly payment is $405.53.
5. Total interest uses the rounded payment: $405.53 × 60 − $20,000 = $4,331.80.

Assumptions

• The interest rate is fixed for the full loan term.
• Payments are equal, made monthly, and begin one month after the loan is issued.
• Interest is calculated monthly at APR ÷ 12.
• Fees, taxes, insurance, PMI, escrow, late charges, and any lender-specific adjustments are not included.

How to Use the Result

The monthly payment is the scheduled amount needed to repay principal and interest within the selected term under the formula’s assumptions. The total-interest figure is the modeled interest over all scheduled payments; it is not the total amount repaid. Add the original loan amount to total interest to get the modeled sum of principal and interest.

For a real estimate, enter the principal, APR, and term shown in the lender’s loan disclosure or other written loan information. APR and the interest rate can differ in how they account for borrowing costs. Because this calculator treats the entered APR as a fixed monthly interest rate, a result based on APR may not match a lender’s payment calculation when fees or other pricing components are treated differently.

What Changes the Payment?

• Loan amount: A larger principal increases the payment and, with the same rate and term, increases total interest.
• APR: A higher entered rate increases the modeled payment and interest cost, all else equal. The calculator does not tell you what rate a lender may offer; use the rate provided for your own scenario.
• Term: A longer term generally spreads repayment across more months, lowering the scheduled monthly amount while increasing the number of periods over which interest accrues.

These relationships describe the formula, not a recommendation about a loan. The monthly figure also does not measure whether a payment fits a household budget, and it cannot determine eligibility or approval.

Common Mistakes and Limits

Enter the loan amount in dollars, the APR as a percentage number, and the term in years. For example, type 8 for 8%, not 0.08; the calculator itself divides the percentage by 1,200 to get a monthly decimal rate. Enter a term in years rather than months: five years becomes 60 payments inside the calculation.

Rounding matters. The payment is rounded to cents before total interest is calculated, so multiplying the displayed payment by the number of payments is consistent with the displayed total. A lender may handle the final payment, daily interest, payment dates, or rounding differently, creating a small difference. If payments are late, extra payments are made, or the rate changes, this fixed-payment estimate no longer describes the actual schedule.

The calculation also excludes fees and optional or required add-ons unless they are already reflected in the figures you enter. It cannot show an amortization schedule, payoff date after extra payments, or outstanding balance at a chosen date. Those questions require additional inputs and calculations. For a variable-rate loan, a single fixed APR cannot represent future rate changes.

Frequently Asked Questions

What does a loan repayment calculator calculate?
It estimates the monthly payment and total interest for a fixed-rate, level-payment loan from its amount, APR, and term. The result follows the assumptions listed above.

Is the monthly payment the full cost of a loan?
No. It covers modeled principal and interest only. Fees, insurance, taxes, escrow, or other charges may add to the amount due.

Why does my lender’s payment differ from this estimate?
The lender may use a different rate basis, payment timing, rounding method, final-payment adjustment, or include charges that this calculator leaves out. Compare the same loan amount, term, and disclosed payment components.

Does a longer loan term reduce total interest?
Not necessarily. In this fixed-rate calculation, a longer term usually lowers each scheduled payment but gives interest more payment periods to accrue, so modeled total interest generally rises.

Can I use this for a variable-rate loan?
Only as a simplified snapshot if you enter one rate and assume it stays fixed. The calculation does not forecast rate changes or recalculate payments over time.

Can I include extra monthly payments?
Not in this calculator. Extra payments can change the payoff timeline and interest, but estimating that requires a separate schedule that applies additional amounts to the balance.

This result is an estimate; the lender’s disclosure gives the exact figures.

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in p | Loan amount | $ | 20000 | 1 | 100000000
in apr | Interest rate (APR) | % | 8 | 0.01 | 100
in yrs | Loan term | years | 5 | 0.0833 | 50
out pmt | Monthly payment | $ | round(p * (apr / 1200) / (1 - (1 + apr / 1200) ^ -(yrs * 12)), 2) | 2
out int | Total interest | $ | pmt * yrs * 12 - p | 2