This calculator estimates the total of your scheduled loan payments and separates that amount into principal and interest. Enter the loan amount, annual percentage rate (APR), and term to see the monthly payment and total interest; the total scheduled cost is the loan amount plus that interest.
Formula
The calculator uses the standard fixed-rate, fully amortizing loan payment formula. It first calculates a level monthly payment, rounds that payment to cents, and then multiplies the rounded payment by the number of months.
- Monthly payment: M = round(P × r / [1 − (1 + r)−n], 2)
- Total scheduled payments: T = M × n
- Total interest: I = T − P
P is the amount borrowed in dollars; r is the monthly interest rate, calculated as APR ÷ 1,200; n is the number of monthly payments, calculated as loan term in years × 12; M is the monthly payment in dollars; T is the total of all scheduled payments in dollars; and I is the interest paid over the schedule in dollars. APR is entered as a percentage per year, so an 8% APR becomes 0.0066667 per month.
The calculator’s first result is monthly payment, followed by total interest and total scheduled payments. Total scheduled payments answers the core cost question for this model. It includes repayment of the original loan principal, so it is not all interest or a fee charged on top of the amount borrowed.
Worked Example
Using the calculator’s default inputs—$20,000 principal, 8% APR, and a five-year term—the schedule has 5 × 12 = 60 monthly payments. The monthly rate is 8 ÷ 1,200 = 0.0066667.
- Payment before rounding = $20,000 × 0.0066667 ÷ [1 − (1.0066667)−60] ≈ $405.5278.
- Monthly payment rounded to cents = $405.53.
- Total scheduled payments = $405.53 × 60 = $24,331.80.
- Total interest = $24,331.80 − $20,000 = $4,331.80.
The payment is rounded before calculating the totals, so the displayed total matches the displayed monthly payment multiplied by the number of payments. Actual loan statements can differ slightly because lenders may use their own rounding and payment-date conventions.
Assumptions
- The interest rate is fixed for the full term.
- Payments are equal monthly payments made at the end of each monthly period.
- Interest compounds monthly using APR divided by 12.
- The calculation excludes fees, taxes, insurance, PMI, escrow, late charges, and optional products because they are not inputs.
What “Total Cost” Includes
People use “total loan cost” to mean different things. Here, total scheduled payments means all modeled monthly payments added together: principal repayment plus interest. For the example, $24,331.80 consists of the $20,000 borrowed and $4,331.80 in modeled interest.
It does not necessarily equal the complete out-of-pocket cost of borrowing. An origination or other upfront charge, for example, is outside the calculator unless it has already been incorporated into the loan amount or rate. A variable rate, skipped payment, extra principal payment, or different payment frequency also changes the schedule. To estimate a particular offer, use the loan amount, APR, and term stated by the lender, and review the lender’s disclosure for other charges and exact payment terms.
How the Payment Breakdown Changes Over Time
With a fixed rate and level payments, the payment amount stays the same in this model, but its composition changes. Interest for a month is calculated on the outstanding balance. Early in repayment, that balance is larger, so a greater share of the payment goes to interest; as principal falls, the interest portion generally falls and more of each payment reduces principal.
For instance, the example’s first month accrues about $133.33 in interest ($20,000 × 0.0066667). From its $405.53 payment, approximately $272.20 remains to reduce principal. The exact balance schedule depends on rounding and the timing convention. A monthly payment is therefore not the same thing as monthly principal repayment.
When to Use It and What Can Change the Result
Use this estimate to understand the arithmetic of a fixed-rate installment loan or to compare scenarios by changing one input at a time. It can help answer questions such as how a longer term affects the payment and total interest, but the calculator does not assess eligibility or tell you whether to borrow.
- Check the amount financed: use the principal actually being financed, not necessarily a purchase price or advertised amount.
- Enter APR as a percentage: enter 8 for 8%, not 0.08. The formula converts it to a monthly rate.
- Use the stated term: a five-year term means 60 monthly payments in this calculation.
- Separate interest from fees: ask whether quoted charges are financed, paid upfront, or excluded from the APR and payment figure shown in a disclosure.
- Expect a different result for nonstandard schedules: variable rates, interest-only periods, balloon payments, irregular dates, and extra payments are not represented.
A longer repayment term usually reduces the level payment for the same principal and rate, while increasing the number of periods over which interest is charged. That is a mathematical effect of this formula, not a prediction of any particular loan offer. The calculator assumes every payment is made on schedule and does not model missed or additional payments.
Frequently Asked Questions
What is the total cost of a loan?
In this calculator, it is the total scheduled payments: rounded monthly payment multiplied by the number of months. That figure includes principal and modeled interest, but excludes fees and other expenses.
Is total interest the same as total loan cost?
No. Total interest is the financing cost represented by interest in this calculation. Total scheduled payments also include repayment of the principal borrowed.
Why might my lender’s total be different?
The lender may include fees or other charges, use different rounding or payment dates, or offer terms the calculator does not model. Check the lender’s disclosure and payment schedule for the exact figures.
Does this calculator include loan fees?
No. It uses only loan amount, APR, and term. Fees, taxes, insurance, PMI, escrow, and optional charges are excluded unless they are already reflected in the inputs.
Does paying extra reduce the total interest?
Extra principal payments can change an amortization schedule, but this calculator assumes fixed monthly payments with no extra payments. It cannot estimate the effect of extra payments without additional schedule details.
This is estimate arithmetic for education, not financial advice; the 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 out tot | Total scheduled payments | $ | pmt * yrs * 12 | 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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