Loan
Calculate monthly payments for personal, auto, or any loan type
Calculators on this site provide estimates for general informational purposes only. They are not financial, investment, tax, or legal advice. Consult a qualified professional before making any decision.
How to use Loan
- 1Enter the loan principal, meaning the amount you actually receive, excluding upfront fees.
- 2Fill in the annual interest rate and the loan term. Add a down payment or residual value if the fields apply.
- 3Calculate to see the monthly payment, total interest and total repayment, then adjust the inputs to compare options.
How amortised loan payments are calculated
Payment = P × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1]P is the principal, r the monthly rate (annual rate ÷ 12) and n the total number of payments. This is the standard amortising loan: interest for the month is charged on the outstanding balance, the rest of the fixed payment goes to principal, and the balance shrinks so next month's interest is lower.
With this method the payment stays constant, which makes budgeting easy, but early payments are mostly interest. The alternative is a straight-line or equal-principal loan, where you repay a fixed slice of principal plus interest on the remaining balance: the first payment is the largest, each one after is smaller, and total interest is lower. On a 1,000,000 loan over 30 years at 4%, the equal-principal route saves roughly 117,000 in interest but starts about 1,300 per month higher. The right choice depends on your cash flow, not just the interest total.
| Method | First payment | Last payment | Total interest | Total repaid |
|---|---|---|---|---|
| Amortised | ≈ 4,774 | ≈ 4,774 | ≈ 719,000 | ≈ 1,719,000 |
| Equal principal | ≈ 6,111 | ≈ 2,790 | ≈ 602,000 | ≈ 1,602,000 |
Amortised vs equal-principal (1,000,000 over 30 years at 4.0%)
Frequently asked questions
Which is better, amortised or equal-principal?
Equal-principal costs less interest but demands noticeably more in the early months. If cash flow is tight now or you expect income to grow, amortised fits better. If your income is stable and you want to minimise interest, equal-principal wins. Neither is universally better; it depends on your cash flow.
Is it worth repaying early?
Compare your loan rate with what you could safely earn elsewhere. If the loan rate is higher, prepaying locks in a risk-free return at that rate. If you have better uses for the money or need an emergency buffer, do not rush. Also check whether your lender charges an early repayment fee or limits how often you can prepay.
How is each payment split between principal and interest?
In an amortising loan, early payments are mostly interest and later ones mostly principal. On a 1,000,000 loan at 4% over 30 years, the first payment is roughly 3,333 interest and only about 1,441 principal; the two only even out around year 10.
How do I convert an annual rate to a monthly rate?
Dividing by 12 gives the nominal monthly rate, which is what most lenders quote. The exact effective monthly rate is (1 + annual)^(1/12) − 1. The difference is tiny, about 0.006 percentage points at 4%, so annual ÷ 12 is fine for everyday estimates.
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