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Loan Calculator
⭐ Featured calculatorCalculate a fixed-rate loan's monthly payment, total interest and first-year amortisation from amount, rate and term.
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| Tip % | Tip Amount | Total |
|---|---|---|
Amortization Schedule (first 12 months)
| Month | Payment | Principal | Interest | Balance |
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About This Tool
This Loan Calculator takes three inputs, the loan amount, the annual interest rate and the term in months, and returns the monthly payment for a fully amortising fixed-rate loan, together with the total you will pay over the life of the loan and how much of that is interest. It is built for car loans, personal loans and mortgages, where the repayment is level and the rate does not change. Beneath the headline figures it prints an amortisation preview covering the first twelve months, showing for each month the payment, how much of it clears principal, how much goes to interest, and the remaining balance. That breakdown is where the shape of a loan becomes visible: early payments are interest-heavy, later ones are principal-heavy. A zero rate is handled as a straight division of the amount by the term, so interest-free arrangements calculate correctly too.
The amortisation formula used
The monthly payment comes from the standard amortisation formula: M equals P multiplied by r multiplied by (1 plus r) raised to the power n, all divided by ((1 plus r) raised to the power n, minus 1). P is the principal, n is the number of monthly payments, and r is the periodic rate, which is the annual rate divided by 100 and then by 12.
The formula assumes equal payments at the end of each month with interest compounding monthly, which is how most instalment loans are written.
Total payment is the monthly figure multiplied by the number of months, and total interest is that total minus the principal. Where the annual rate is zero the formula would divide by zero, so the tool falls back to principal divided by term.
The amortisation preview is built by iteration rather than by formula. For each month it charges interest on the outstanding balance at the periodic rate, treats the remainder of the payment as principal, and subtracts that from the balance before moving to the next month. It runs for twelve months, or the full term if the loan is shorter.
The formula assumes equal payments at the end of each month with interest compounding monthly, which is how most instalment loans are written.
Total payment is the monthly figure multiplied by the number of months, and total interest is that total minus the principal. Where the annual rate is zero the formula would divide by zero, so the tool falls back to principal divided by term.
The amortisation preview is built by iteration rather than by formula. For each month it charges interest on the outstanding balance at the periodic rate, treats the remainder of the payment as principal, and subtracts that from the balance before moving to the next month. It runs for twelve months, or the full term if the loan is shorter.
Worked example: 18,000 over five years at 6.9 percent
Consider borrowing 18,000 at 6.9 percent annual interest over 60 months.
The monthly rate is 0.069 divided by 12, which is 0.00575. Raising 1.00575 to the power 60 gives roughly 1.41068. The numerator is 18,000 multiplied by 0.00575 multiplied by 1.41068, which is about 146.01. The denominator is 1.41068 minus 1, or 0.41068. Dividing gives a monthly payment of about 355.51.
Over 60 months that totals roughly 21,330.88, of which 3,330.88 is interest, about 18.5 percent of the amount borrowed.
The first row of the amortisation preview shows how uneven the split is at the start. Month one charges interest of 18,000 multiplied by 0.00575, or 103.50, leaving 252.01 to reduce the principal and a closing balance of 17,747.99. By month twelve the balance has fallen far enough that the interest charge is around 95, and more than 260 of the same payment is going to principal. The payment never changes, only its composition.
The monthly rate is 0.069 divided by 12, which is 0.00575. Raising 1.00575 to the power 60 gives roughly 1.41068. The numerator is 18,000 multiplied by 0.00575 multiplied by 1.41068, which is about 146.01. The denominator is 1.41068 minus 1, or 0.41068. Dividing gives a monthly payment of about 355.51.
Over 60 months that totals roughly 21,330.88, of which 3,330.88 is interest, about 18.5 percent of the amount borrowed.
The first row of the amortisation preview shows how uneven the split is at the start. Month one charges interest of 18,000 multiplied by 0.00575, or 103.50, leaving 252.01 to reduce the principal and a closing balance of 17,747.99. By month twelve the balance has fallen far enough that the interest charge is around 95, and more than 260 of the same payment is going to principal. The payment never changes, only its composition.
Reading the results and what they leave out
The monthly payment is the figure to compare across offers, but total interest is the one that shows what a longer term actually costs. Stretching the same 18,000 from 60 months to 84 months lowers the monthly payment but increases total interest substantially, because the balance sits outstanding for longer. Compare offers on total payment, not just the headline instalment.
The amortisation preview explains why overpaying early is disproportionately effective. Any extra amount you pay comes straight off the balance, and every future interest charge is computed on that smaller balance, so the saving compounds for the rest of the term.
The calculation covers principal and interest only. It does not include arrangement fees, broker fees, insurance, property taxes or any early repayment penalty, so your real outgoing on a mortgage will be higher than the figure shown. It also assumes a fixed rate for the whole term: on a variable or tracker loan the payment will move with the rate. Treat the output as a planning estimate rather than a quotation, and always check the lender's own figures and APR before signing. This is general information, not financial advice.
The amortisation preview explains why overpaying early is disproportionately effective. Any extra amount you pay comes straight off the balance, and every future interest charge is computed on that smaller balance, so the saving compounds for the rest of the term.
The calculation covers principal and interest only. It does not include arrangement fees, broker fees, insurance, property taxes or any early repayment penalty, so your real outgoing on a mortgage will be higher than the figure shown. It also assumes a fixed rate for the whole term: on a variable or tracker loan the payment will move with the rate. Treat the output as a planning estimate rather than a quotation, and always check the lender's own figures and APR before signing. This is general information, not financial advice.
Frequently Asked Questions
With the amortisation formula M = P × r × (1+r)^n / ((1+r)^n − 1), where P is the amount borrowed, r is the monthly interest rate (annual rate divided by 12) and n is the number of monthly payments. It produces a level payment that clears both interest and principal by the final month.
It is a month-by-month table showing how each payment divides between interest and principal, along with the balance remaining. Early payments are mostly interest because interest is charged on a large outstanding balance; as the balance shrinks the principal portion grows, though the total payment stays the same.
Enter the term in months, not years: 12 months is one year, 60 is five years and 360 is a thirty-year mortgage. Using years by mistake is the most common input error and produces a wildly inflated monthly payment, so check the figure looks plausible before relying on it.
No. It calculates principal and interest only. Arrangement fees, broker commission, payment protection insurance, property tax and buildings insurance are excluded, so a real mortgage outgoing will exceed this figure. Compare lenders using their stated APR, which folds mandatory fees into a single rate.
The tool divides the loan amount evenly across the term and reports total interest as zero. That matches genuine interest-free credit, such as a zero-percent retail finance deal. The standard formula cannot be used at a zero rate because its denominator would be zero, so this fallback is applied instead.
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