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Finance & Money

Free Loan Calculator

Find the monthly payment on a loan, and see how much of it is interest rather than principal.

Free to useNo sign-up requiredNo watermarkRuns in your browser

Last reviewed: 30 September 2026 by Vishal Senthilkumar

This free loan calculator takes the amount you want to borrow, the annual interest rate and the term, and returns the monthly payment, the total interest you will pay and the total amount repaid over the life of the loan.

The figure worth looking at is the total interest, not the monthly payment. Lenders compete on the monthly number because a longer term makes it smaller while quietly making the loan far more expensive. The breakdown below shows both.

How this tool works

  1. Enter the loan amount

    The amount you actually borrow, after any deposit and including any fees rolled into the loan.

  2. Enter the annual interest rate

    Use the nominal annual rate the lender quotes. If you have been given an APR that includes fees, using it here gives you a more realistic total cost.

  3. Set the term

    In years or months, depending on how the loan is described. Try a few terms to see what a shorter one does to the total interest.

  4. Compare the monthly payment against the total cost

    Both are shown. A longer term reduces the monthly payment and increases the total interest, sometimes dramatically.

How it works

The calculator uses the standard amortising loan formula. Every payment is the same size, but its composition shifts: early payments are mostly interest because the outstanding balance is large, and later payments are mostly principal.

Interest is charged on the balance still outstanding, not on the original amount. That is why paying a little extra early has an outsized effect - it removes principal that would otherwise have accrued interest for years.

The annual rate is divided by twelve to get a monthly rate, which is how most consumer lenders quote and charge. If your lender compounds differently, the true cost will differ slightly from the figure here.

A zero interest rate is handled as a simple division of the amount by the number of payments, rather than breaking the formula.

What actually changes the cost of a loan

  • The interest rate. On a long loan, a single percentage point can be worth thousands.
  • The term. Stretching a loan from three years to five lowers the monthly payment and raises total interest, because you are borrowing for longer.
  • Overpayments. Extra money goes against principal, which cuts every future interest charge. Check whether your lender allows this without penalty.
  • Fees. Arrangement, valuation and early-repayment fees are not in the interest rate. The APR is designed to capture them.
  • The amount. Reducing what you borrow, by a larger deposit or a cheaper purchase, is the most direct lever of all.

Comparing loan offers properly

Two loans with the same monthly payment can differ enormously in total cost. To compare fairly, hold the term constant and look at the total repayment.

  • Compare APR rather than the headline interest rate, because APR includes most compulsory fees.
  • Check whether the rate is fixed or variable. A low variable rate can rise, and the monthly payment with it.
  • Ask about early repayment charges before choosing a longer term "just in case".
  • Watch for loans where the term is quoted in months to make it sound shorter than it is.

Formula

Monthly payment

M = P × (r(1 + r)ⁿ) ÷ ((1 + r)ⁿ − 1)

P is the amount borrowed, r the monthly rate, n the number of payments.

Monthly rate

r = annual rate ÷ 12 ÷ 100

Total repaid

total = monthly payment × number of payments

Total interest

interest = total repaid − amount borrowed

Worked examples

10,000 over 3 years at 7%

The monthly payment is about 308.77, total repayment about 11,115 and total interest about 1,115.

The same loan over 5 years

The payment falls to about 198.01, but total interest rises to about 1,881 - the lower monthly cost buys you a considerably more expensive loan.

One percentage point more

10,000 over 5 years at 8% instead of 7% costs roughly 265 more in total interest, for a payment barely 5 higher.

A zero-interest deal

1,200 over 12 months at 0% is simply 100 a month, with no interest at all.

Frequently asked questions

Is this loan calculator free?

Yes, free with no sign-up. Nothing you enter is stored or transmitted - the maths happens in your browser.

How is a monthly loan payment calculated?

With the standard amortising formula, which spreads principal and interest into equal payments. Interest is charged on the outstanding balance, so it makes up more of the early payments and less of the later ones.

Why does a longer loan term cost more overall?

Because you are borrowing the money for longer, so interest accrues over more months. The monthly payment falls but the total interest rises.

What is the difference between interest rate and APR?

The interest rate is the cost of borrowing the money. The APR also folds in most compulsory fees, which makes it the better figure for comparing offers.

Does this include fees or insurance?

No. It calculates interest on the amount you enter. To approximate the true cost, either add fees to the loan amount or use the APR rather than the headline rate.

Will my real payment match this exactly?

It will be very close. Lenders differ in rounding and in compounding conventions, and some add fees or insurance to the monthly figure.