Loan Interest Calculator

Enter Calculation

Loan Amount:

Annual Interest Rate (%):

Loan Term (years):

Compound Period: Annually (1/year) Semi-annually (2/year) Quarterly (4/year) Monthly (12/year) Semi-monthly (24/year) Bi-weekly (26/year) Weekly (52/year) Daily (365/year)

Formula

Show calculation steps (1)

1. Total Interest

   

   Total interest = total of all payments minus the original loan amount

Results

Payment per Period

$1,910.12

Loan Details

Loan Amount	$100,000.00
Nominal Annual Rate	5.50%
Effective Annual Rate	5.64%
Payments per Year	12
Payback Ratio	1.15x the principal
50% Principal Payback Period	2.8 years (33 payments)
Total of Payments	$114,606.97
Total Interest	$14,606.97

Year-by-Year Breakdown

Year	Principal Paid	Interest Paid	Remaining Balance
1	$17,867.34	$5,054.06	$82,132.66
2	$18,875.20	$4,046.20	$63,257.47
3	$19,939.91	$2,981.49	$43,317.56
4	$21,064.67	$1,856.72	$22,252.89
5	$22,252.89	$668.51	$0.00

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What this calculator does

The Loan Interest Calculator works out the regular payment on an amortizing loan, then shows you the total interest, the total of all payments, and the effective annual rate (EAR). It is currency-neutral, so it works for loans in any country — just enter your amounts in your own currency. It is ideal for mortgages, car loans, personal loans, and any fixed-rate loan that is paid off in equal installments.

Each payment is split between repaying principal and paying interest.

The inputs you enter

• Loan Amount – the principal you borrow.
• Annual Interest Rate (%) – the nominal yearly rate.
• Loan Term (years) – how long until the loan is fully repaid.
• Compound Period – how often interest is applied and a payment is made: annually (1), semi-annually (2), quarterly (4), monthly (12), semi-monthly (24), bi-weekly (26), weekly (52), or daily (365).

The formula

The tool uses the standard amortization payment formula. First it finds the periodic rate i = annualRate ÷ compoundsPerYear ÷ 100 and the number of payments n = years × compoundsPerYear. Then:

Payment = P × [ i(1 + i)ⁿ ] ÷ [ (1 + i)ⁿ − 1 ]

Total of payments = Payment × n, and total interest = total of payments − principal. The effective annual rate is calculated as EAR = (1 + i)^compoundsPerYear − 1, which reflects the true yearly cost once compounding is included.

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Over the term, the interest part of each payment shrinks while the principal part grows.

Worked example

Borrow 20,000 at 6% annual interest over 5 years, compounded monthly (12/year). The periodic rate is 0.06 ÷ 12 = 0.005, and there are 5 × 12 = 60 payments. The payment comes to about 386.66 per month. Total of payments ≈ 23,199.36, so total interest ≈ 3,199.36. The effective annual rate is (1.005)¹² − 1 ≈ 6.17%, slightly above the 6% nominal rate because of monthly compounding.

FAQ

Why is the effective annual rate higher than the rate I entered? The rate you enter is nominal. When interest compounds more than once a year, the effective rate is higher. The more frequent the compounding, the larger the gap.

Does a shorter compound period mean cheaper or more expensive payments? More frequent payments are smaller individually, but you make more of them. Bi-weekly or weekly schedules can slightly reduce total interest because principal is paid down faster.

Can I use this for a mortgage? Yes. Choose monthly compounding for most fixed-rate mortgages, enter the loan amount, rate, and term, and you will see the monthly payment and lifetime interest cost.