How do I calculate loan interest?

For monthly payments, use the amortization formula: M = P[r(1+r)^n]/[(1+r)^n-1]. Total interest = (Monthly Payment × Number of Months) - Loan Amount. For a $20,000 loan at 6% for 5 years: monthly payment = $386.66, total interest = $3,199.60.

What is the difference between APR and interest rate?

Interest rate is the cost of borrowing the principal. APR (Annual Percentage Rate) includes the interest rate plus other fees and costs. APR is always equal to or higher than the interest rate.

How can I reduce the total interest on my loan?

Make extra payments toward principal, refinance to a lower rate, choose a shorter loan term, or make bi-weekly instead of monthly payments. Even small extra payments can save thousands in interest.

What is loan amortization?

Amortization is the process of paying off a loan through regular payments. Early payments are mostly interest, later payments are mostly principal. An amortization schedule shows the breakdown for each payment.

Loan Interest Calculator

Calculate total loan interest, monthly payments, and payoff schedule. Perfect for personal loans, auto loans, and student loans.

Calculate

Loan Amount ($)

Annual Interest Rate (%)

Loan Term (Years)

Formula

Monthly Payment = P[r(1+r)^n]/[(1+r)^n-1] where P=principal, r=monthly rate, n=number of payments

Example

loan Amount:20000

interest Rate:6

loan Term:5

monthly Payment:386.66

total Interest:3199.6

total Paid:23199.6

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