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01 Loan payments

Repayment Amount Calculator: Monthly Loan Payment

Calculator No. 01-2573 · Updated · Formula and assumptions shown below

Monthly payment $405.53
Total interest
$4,331.80
= Monthly payment × loan term × 12 − loan amount
Loan amount
$20,000
Input
Interest rate (APR)
8 %
Input
You enter
Loan amount ($), Interest rate (APR) (%), Loan term (years)
You get
Monthly payment ($), Total interest ($)
Rounding
2 dp

Estimate for education, not financial advice. The result follows from the numbers you enter and the formula shown. It is not a quote or an offer, and it does not include fees, taxes or insurance unless the calculator asks for them. Ask your lender for the exact figures.

A repayment amount calculator estimates the fixed monthly payment needed to repay a loan, plus the total interest paid over the term. Enter the loan amount, annual percentage rate (APR), and term in years to see an estimated payment and interest total.

Formula

The calculator uses the standard fixed-payment loan formula. It first calculates the payment that amortizes the principal over the term, rounds that monthly payment to cents, and then estimates interest as all scheduled payments minus the amount borrowed.

  • p is the starting loan principal, in dollars.
  • apr is the annual percentage rate as a percentage, such as 8 for 8% per year.
  • r is the monthly rate expressed as a decimal: r = apr / 1200.
  • n is the number of monthly payments: n = yrs × 12.
  • pmt is the monthly payment in dollars, rounded to the nearest cent.

Monthly payment: pmt = round[p × r / (1 − (1 + r)−n), 2]. Total interest: int = pmt × n − p. The rate conversion divides APR by 12 to obtain a monthly rate, with the percentage converted to a decimal. The formula assumes equal payments made monthly and a rate that does not change.

Worked Example

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

  1. Convert the APR to a monthly rate: 8 / 1200 = 0.0066667, or about 0.66667% per month.
  2. Convert the term to payments: 5 × 12 = 60 months.
  3. Substitute into the payment formula: $20,000 × 0.0066667 / [1 − (1.0066667)−60] = about $405.53 per month after rounding to cents.
  4. Calculate total interest using the rounded payment: $405.53 × 60 − $20,000 = $4,331.80.

The displayed estimate is therefore a monthly payment of $405.53, with estimated total interest of $4,331.80. Using the rounded payment for the total makes the arithmetic consistent with the scheduled payment shown.

Assumptions

  • The interest rate is fixed for the entire term.
  • Payments are equal and made monthly, with the first payment after one month.
  • Interest is compounded monthly using APR divided by 12.
  • The estimate excludes fees, taxes, insurance, PMI, and escrow; none of these are calculator inputs.
  • The term is treated as a whole number of monthly payments, even when the entered years produce a fractional month.

When to Use a Repayment Amount Calculator

Use this calculator to understand the payment implied by a loan’s principal, APR, and scheduled term, or to compare hypothetical combinations of those inputs. It is useful for a basic payment estimate before you review a lender’s formal repayment schedule. Enter the principal you expect to borrow—not the total amount you plan to spend—and use the APR and term supplied for the specific loan when available.

The APR is an input, not a prediction. If you do not have a quoted rate, a placeholder can show how the arithmetic changes, but it does not indicate what rate a lender will offer or whether an application will be approved. Obtain the actual rate, fees, and payment schedule from the lender’s disclosure.

How to Read the Results

The monthly payment is the scheduled principal-and-interest amount under the formula’s assumptions. In an amortizing loan, each payment covers interest accrued for the period and reduces some principal. Early in the schedule, the interest portion is generally larger because the outstanding balance is higher; as the balance falls, more of each level payment goes toward principal.

Total interest is the sum of scheduled payments minus the original principal. It is not the same as the total amount repaid: the latter is principal plus interest, or pmt × n. In the example, total scheduled payments are $24,331.80, comprising $20,000 principal and $4,331.80 interest. A longer term generally means more payment periods, so total interest can rise even when the monthly payment falls, assuming the same principal and rate.

Common Errors and Limits

  • Mixing percentage formats: enter 8 for 8%, not 0.08. The calculator converts the percentage internally.
  • Using the wrong term: this field takes years. A 60-month term is five years, not 60 years.
  • Confusing payment with total cost: the monthly result excludes costs not entered, while total interest is not total payments.
  • Rounding at different stages: monthly payments are rounded to cents before total interest is calculated, so results can differ slightly from calculations that retain extra decimal places throughout.
  • Assuming every loan fits the formula: variable rates, irregular payment schedules, interest-only periods, balloon payments, and fees financed into the balance are not represented.

The formula is a mathematical estimate, not a complete loan quote. A lender may calculate amounts using exact payment dates, daily interest, fee treatment, or other contract terms. Those details can make the disclosed figures differ from this result.

Frequently Asked Questions

How do I calculate a monthly loan repayment?
Convert APR to a monthly decimal rate by dividing the percentage by 1,200, convert the term to months, and apply the fixed-payment formula shown above. Round the payment to cents.

Does the repayment amount include interest?
Yes. The calculated monthly payment includes both interest and principal under the fixed-rate amortization assumption. It does not include fees, taxes, insurance, or other unentered charges.

Why does a longer loan term lower the monthly payment?
The same principal is spread across more scheduled payments. With the same rate, that usually lowers each payment but can increase the total interest because interest accrues over a longer period.

Is APR the same as the monthly interest rate?
No. APR is entered as an annual percentage. This calculator uses APR divided by 12 to estimate the monthly rate; enter the APR as a percentage, not as a decimal.

Why does my lender’s payment differ?
The lender’s figure may reflect fees, payment dates, a different rate convention, a financed charge, or terms that are not included in this estimate. Check the loan disclosure for the exact calculation and schedule.

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

Related

Formula used
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

Each line is one input (in, sel, list) or one result (out: label, unit, formula, decimals). How the calculators work

Method: the standard loan formula for this calculation, fixed rate and monthly compounding unless stated, rounded as each result states. Not financial advice; no lender, rate or product is recommended. See formulas and assumptions, the disclaimer or report an error.

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