What the loan calculator does
Enter a loan amount, an annual interest rate and a term, and the calculator shows the monthly payment (often called EMI), the total interest you will pay and the total you will repay. It also gives a year-by-year amortization schedule, so you can see how much of each year goes to principal and how much to interest.
It uses the standard fixed-rate amortized loan formula, the same one used for most mortgages, car loans and personal loans with equal monthly instalments. Loans with a 0% rate are handled as simple equal division.
How to use it
- Enter the loan amount and the yearly interest rate.
- Set the term in years or in months with the toggle.
- Read the monthly payment, total interest and total repayment, then check the yearly table.
The formula
Monthly payment for a fixed-rate loan:
M = P x r x (1 + r)^n / ((1 + r)^n - 1)
P = loan amount
r = monthly rate = annual rate / 12 / 100
n = number of monthly payments
Example: 200,000 at 6% for 20 years
r = 0.005, n = 240 -> M is about 1,432.86
Total paid = 343,886 Interest = 143,886What the amortization table shows
Early payments are mostly interest, because the balance is still large. Over time the interest share falls and the principal share grows. The yearly table makes that visible and shows the remaining balance at the end of each year, which helps when you plan an early repayment.
Ways to pay less interest
- Shorten the term. Monthly payments rise but total interest falls sharply.
- Make extra payments toward principal, if your lender allows it without a penalty.
- Compare offers by total cost, not only the monthly figure.
- Remember fees, insurance and taxes are not part of this calculation, so your real cost can be higher.
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