What is the Simple Loan Calculator?
This calculator works out the fixed monthly payment on an amortizing loan, along with the total interest you will pay and the total amount repaid over the life of the loan. It applies to any standard fixed-rate installment loan such as a personal loan, auto loan, or fixed-rate mortgage, and is not tied to any specific country or tax rule.
How to use it
Enter three values: the loan amount (the principal you borrow), the annual interest rate as a percentage (APR), and the loan term in years. The calculator converts the annual rate to a monthly rate and computes a level payment that fully pays off the loan over the term.
The formula explained
The standard amortization formula is $$PMT = \dfrac{P \cdot r}{1 - (1 + r)^{-n}}$$ where \(P\) is the principal, \(r\) is the monthly interest rate (annual rate \(\div 100 \div 12\)), and \(n\) is the number of monthly payments (years \(\times 12\)). Multiplying the payment by \(n\) gives the total repaid, and subtracting the original principal yields the total interest. If the rate is zero, the payment is simply the principal divided by the number of months.
Worked example
For a $20,000 loan at 5% annual interest over 5 years: \(r = 0.05 / 12 \approx 0.0041667\) and \(n = 60\). The monthly payment is about $377.42. Total paid is $$377.42 \times 60 \approx 22{,}645.48$$ so total interest is about $2,644.48.
FAQ
Does this include fees or insurance? No — it covers principal and interest only. Origination fees, insurance, and taxes are not included.
Is interest compounded monthly? Yes, this uses standard monthly compounding, which matches how most consumer installment loans are quoted.
What if I enter 0% interest? The payment becomes the loan amount divided evenly across all months, with zero total interest.
