Loan Calculator
Estimate monthly payments, total interest and total cost of a loan.
Knowledge Base & Educational Companion: How Loan Repayment Works
An amortizing loan is repaid in equal instalments. Early payments are mostly interest; later ones mostly principal, until the balance reaches zero.
1. The Payment Formula
Monthly payment = P·i·(1+i)ⁿ ÷ ((1+i)ⁿ−1), where P is principal, i the monthly rate and n the number of months.
2. Interest Cost
Total interest is total paid minus the principal. A longer term lowers the monthly payment but raises total interest paid.
3. Rate Matters Most
Even a small change in the annual rate compounds over hundreds of payments, so comparing rates is the biggest lever on total cost.
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