Understand the real cost of a loan

Loans can look simple at first, but the repayment method and term can change how much interest you pay. Use this calculator to compare amortized payments and equal principal payments, then review totals and the schedule.

Total interest and total paid Two repayment methods Payment schedule table Charts, compare, PDF export
Totals
Interest and total paid
Breakdown
Principal vs interest
Schedule
Per period details

How to use the Loan Interest Calculator

  1. 1

    Enter loan amount and interest rate

    Type the amount you plan to borrow and the annual interest rate.

  2. 2

    Set the term and unit

    Enter the term and select whether it is in years or months.

  3. 3

    Select repayment method and payment frequency

    Choose amortized or equal principal repayment, then pick monthly or yearly payments.

  4. 4

    Calculate and review

    Check total interest, total paid, charts, and the schedule. Add scenarios to compare and export a PDF if needed.

Detailed guide and references▶

Loan basics

A loan is borrowed money that is repaid over time with interest. Total interest depends on the interest rate, the number of payments, and how principal is repaid over the schedule.

Stacked coins on a table
Loan cost is usually driven by rate and term, but repayment method changes the interest pattern too

Repayment methods

Equal total payments (amortized)

Each payment is the same amount when the interest rate is not zero. Early payments include more interest and less principal. Over time, the interest part decreases and the principal part increases.

  • Common for mortgages and auto loans
  • Stable payment amount per period (except for rate changes on variable rate loans)

Equal principal payments

The principal portion is constant each period. Because interest is calculated on the remaining balance, the total payment tends to decrease over time.

  • Higher starting payments, lower ending payments
  • Useful when you want faster principal reduction early

What affects total interest

  • Interest rate: higher rates increase total interest for the same term.
  • Term length: longer terms usually increase total interest, even if payments per period are lower.
  • Payment frequency: changes per period rate and schedule length.
  • Repayment method: changes the balance path, which changes interest accumulation.

FAQs

Are the results exact?▶

No. Results are simplified estimates and do not include lender fees, insurance, taxes, or special contract terms.

What is the difference between amortized and equal principal?▶

Amortized aims for a constant payment per period (when rate is not zero). Equal principal keeps the principal portion constant, so payments often decrease over time.

Does this calculator include extra payments?▶

No. Use this as a baseline. Extra payments and prepayment penalties can change the schedule and interest totals.

Can I calculate a zero interest loan?▶

Yes. A zero rate case becomes principal divided by number of periods.

Key takeaways

  • Total interest depends on rate, term, frequency, and how principal declines
  • Amortized payments are steady per period (rate not zero), while equal principal payments usually decline over time
  • A schedule table is the fastest way to understand interest vs principal each period
  • Use scenarios to compare terms and methods before committing
  • Real loans may include fees and rules that change results

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Calculator

Enter loan inputs, then press Calculate

These results are for reference only and were developed for educational purposes.

The results shown are for general reference only and may differ from actual loan agreements.