Loan Calculator

An instalment loan is three fixed things, an amount, a rate and a number of payments, and one formula ties them together: A = P × i ÷ (1 − (1 + i)⁻ⁿ), where P is the amount borrowed, i is the interest rate for a single payment period and n is the number of payments. That formula is all any loan calculator really does. What it cannot tell you is where the money goes, which is why this page prints the amortisation schedule itself instead of one monthly figure. Every payment, split into interest and principal, with the balance that survives it.

A borrowed dollar costs nothing until time passes over it. Interest in any period is the balance still outstanding multiplied by the periodic rate, and nothing else. That single sentence explains the shape of every schedule ever printed. The first row carries the largest interest charge the loan will ever produce, because the balance has never been higher, and every row after it carries a little less. The payment itself does not move. What moves is the share of it that is actually buying down the debt.

Put numbers on it. The Federal Reserve reports an average rate of 11.86 percent on a 24 month personal loan at commercial banks in its July 2026 data, so take that as a fair rate for an unsecured loan. Borrow $15,000 over 60 months at 11.86 percent and the payment is $332.61. The first one is $148.25 of interest and $184.36 of principal. The last one is $1.93 of interest and $330.42 of principal. Same payment, completely different work.

Where the payment figure comes from

The derivation is two lines. Write the balance after payment t as p_t. Each period the balance grows by the rate and then the payment comes off it, so p_t = p_t−1(1 + i) − A. Unroll that recurrence and the balance after t payments is P(1 + i)^t − A((1 + i)^t − 1) ÷ i. A loan is fully amortising when the balance after the last payment is zero, so set p_n = 0, solve for A, and the payment formula falls out. Nothing else is assumed. The only judgement call in the whole thing is that the rate compounds on the same timetable as the payments, which is what this calculator and almost every other one does.

The periodic rate is the annual rate divided by the number of payments in a year. Monthly payments at 11.86 percent means 0.9883 percent a month. Fortnightly means dividing by 26, weekly by 52. Change the frequency and both i and n change together, which is why switching frequency is not the same act as paying more.

The split moves, and it moves slowly at first

People expect the halfway payment to leave them halfway through the debt. It does not. Thirty payments into that five year loan, 72.2 percent of all the interest the loan will ever charge has already been paid, but the balance is still $8,598.35, which is 57 percent of what was borrowed. Interest is front loaded, not because a lender arranged it that way, but because interest is charged on a balance that starts large.

How pronounced that is depends entirely on the term. On a 60 payment loan at 11.86 percent, principal is already the larger half of the very first payment. Stretch the same idea to 360 payments at 6.5 percent and principal does not overtake interest until payment 233, nineteen and a half years in. The crossover point is the single most useful thing a schedule tells you, and it is invisible on any calculator that prints only a monthly figure.

APR against the rate written on the note

Two different numbers describe the same loan. The Consumer Financial Protection Bureau defines the interest rate as the cost paid to the lender for borrowing, on top of the principal, and the annual percentage rate as that rate plus any additional lender fees, including origination charges and other fees charged when the loan is made. The Truth in Lending Act requires the APR to be disclosed before the loan is finalised, precisely so that two offers can be compared on one number.

The arithmetic underneath is simpler than the language. An APR is the rate that discounts the stream of payments back to the cash you actually received. Take the $15,000 loan again and add a 5 percent origination fee deducted from the proceeds. You still pay $332.61 sixty times, because interest is charged on $15,000, but only $14,250 reaches your account. Solve for the rate that makes sixty payments of $332.61 worth $14,250 today and it is 14.14 percent, not 11.86. A 1 percent fee would have made it 12.30 percent. That is why the fee field on this calculator sits apart from the rate: fees never earn interest, they shrink the loan proceeds, and the gap they open is the whole reason APR exists as a separate disclosure. One large lender publishes a 6.625 percent rate beside a 6.794 percent APR on the same loan for exactly this reason.

Which one belongs in the calculator? The rate on the note, if you want a schedule that matches your statements. The APR, if you want a deliberately conservative estimate of what the borrowing costs.

What an extra payment actually buys

An extra amount added to a payment does not sit in a pot. It comes straight off the balance, which means every interest charge from that point on is computed against a smaller number, which means more of the next scheduled payment is principal too. The effect compounds in the borrower's favour, and it is the only lever in this calculator that gets stronger the earlier you pull it.

On the $15,000 loan, an extra $25 a month saves $488.37 and clears the debt five months early. An extra $50 saves $887.17 and ten months. An extra $100 saves $1,498.84 and seventeen months, finishing in 43 payments instead of 60. Notice that doubling the extra does not double the saving. Each additional dollar arrives against a balance the earlier dollars have already reduced.

The term is the loudest lever of all

Borrowers usually shop for a payment they can afford, and the quickest way to lower a payment is to spread it further. The same $15,000 at the same 11.86 percent costs $497.21 a month over 36 payments and $2,899.68 in total interest. Over 60 payments the payment falls to $332.61 and the interest rises to $4,956.34. Over 84 payments the payment is $263.67 and the interest is $7,148.23. The payment dropped by 47 percent and the interest bill grew by a factor of two and a half. Both facts are true at once, and the schedule is where you see the trade rather than argue about it.

Frequency is a separate question

Paying fortnightly rather than monthly is often sold as a trick. Mostly it is arithmetic. Twenty six fortnightly payments of half the monthly amount add up to thirteen monthly payments a year rather than twelve, so the saving comes from the extra month, not from the frequency. Where frequency genuinely helps is that interest accrues against a balance that is knocked down more often. Set the frequency selector above to fortnightly, keep the same term, and the schedule shows both effects at once.

When the saving does not arrive

Two situations break the promise the schedule makes. The first is a precomputed loan using the Rule of 78s, which apportions interest to early payments by the sum of the digits method rather than charging it on the outstanding balance. Pay one of those off early and much of the interest has already been assessed, so the refund is smaller than a normal schedule implies. In the United States the method is barred on consumer loans with a term longer than 61 months, and the United Kingdom abolished it entirely through the Consumer Credit (Early Settlement) Regulations 2004.

The second is a prepayment penalty. Where one exists it usually bites only within the first three or five years, and according to the Consumer Financial Protection Bureau it does not normally apply to extra principal paid in small amounts over time, though a single large lump sum can trigger it. Read the paragraph before you round your payment up.

Three worked examples

1. 1A card balance moved onto an instalment loan

   $5,000 at 22.5 percent over 24 months is $260.63 a month and $1,255.05 of interest. The first payment is $93.75 of interest, so 36 percent of it disappears before the balance moves. Short and expensive still beats revolving, because the schedule has an end date.

2. 2An undergraduate student loan

   $35,000 at 6.52 percent over 120 months is $397.77 a month and $12,733.13 of interest. Watch the origination fee here: a statutory 1.057 percent on a Direct subsidised or unsubsidised loan, and 4.228 percent on a Direct PLUS loan, which is deducted before the money arrives and so belongs in the fee field rather than the rate field.

3. 3An interest free retail plan

   $2,400 at 0 percent over 12 months is exactly $200 a month and no interest at all. The schedule turns into a straight line, every row identical, the balance falling by the same amount each time. It is worth loading once, because it is the clearest possible picture of what interest was doing in every other example.

Loans with extra moving parts

Everything above applies to any amortising loan, but two common loans carry costs that are not interest and do not belong in this schedule. A home loan adds property tax, insurance and related escrow items to the payment, and the mortgage calculator handles those. A vehicle loan adds a trade in, sales tax and fees to the amount financed, and the car payment calculator handles those. For everything else, a personal loan, a student loan, a consolidation loan, a business loan or a card balance moved onto fixed terms, the schedule on this page is the whole picture.