About Loan Calculator
Loan Calculator produces the fixed monthly payment for a fully amortising loan, where each payment covers that month interest and reduces the principal until the balance reaches zero. It converts the annual rate into a monthly rate, multiplies the term by twelve to get the payment count, and applies the standard annuity formula to the amount borrowed.
Alongside the monthly figure it reports the total paid over the life of the loan and the total interest, which is usually the more revealing pair. A rate difference of half a percentage point is easy to skim past in a product brochure and hard to ignore once it is expressed as a four- or five-figure interest total over twenty years.
The model assumes a constant rate for the whole term and no fees, insurance or arrangement charges — real loan costs are higher than the arithmetic suggests. It also assumes the loan is fully repaid at term, so it says nothing about an interest-only period or an early-repayment penalty. A zero rate is handled by dividing the principal evenly across the payments.
There is no amortisation schedule behind the headline figures. The tool reports the monthly payment, the total paid and the total interest, but not the month-by-month table that would show how the split between interest and principal shifts over time, and not the balance outstanding at any chosen point — which is the figure you need to judge an early repayment or a refinance. Extra or irregular payments cannot be modelled, so the effect of paying a little more each month is outside its scope, as is any change to the term, the rate or the payment amount partway through. Overpayment limits and repayment penalties are not considered, and the share of the first payment that goes to interest rather than principal is not reported even though it is the number most people find surprising.
How to use Loan Calculator
- 1 Enter the amount borrowed in the loan amount field.
- 2 Enter the annual interest rate as a percentage.
- 3 Enter the term in years.
- 4 Read the monthly payment, the total paid and the total interest.
Frequently asked questions
Does this figure include insurance and arrangement fees?
No. Only principal and interest are modelled, so the real monthly cost will be higher once lender fees and any required insurance are added. Compare the interest total rather than the payment when judging two offers.
Why does the total interest exceed the amount borrowed on a long term?
That is normal amortisation, not an error. On a twenty-year loan at a typical rate the interest total approaches the principal, because interest is charged on the outstanding balance every month for the full term.
Can it handle a variable rate?
No — a single rate applies throughout. For a variable-rate product you would run the calculation per rate segment and add the results, using the balance remaining at each change as the new principal.
What if I enter a rate of zero?
The tool divides the principal evenly by the number of monthly payments. This is what an interest-free instalment plan looks like, so the monthly figure reported is the instalment rather than an amortised payment.
Free, online, and private
Free to use
Loan Calculator is completely free. There is no account to create, no login, and no hidden charge or usage limit.
Runs online in your browser
It is a free online tool that runs entirely in your browser. Nothing to download or install — open the page and start using it right away.
Your data stays private
All processing happens locally on your device. Your input is never uploaded, stored, or tracked, so it never leaves your browser.
How Loan Calculator behaves in detail
These are the specifics of this implementation — the exact ranges, defaults and fixed settings you are working with.
| Parameter | Value |
|---|---|
| Payment formula | P × r ÷ (1 − (1 + r)^−n), with r a monthly rate and n the term in months |
| Rate conversion | the annual percentage is divided by 100 and then by 12 — a nominal monthly rate, not an effective one |
| Term conversion | years × 12, so the term always lands on a whole number of monthly instalments |
| Zero-rate case | a rate of exactly 0 bypasses the formula and divides the principal by the month count |
| Outputs | monthly payment, total paid, and total interest, each fixed to 2 decimal places |
| Defaults | 200,000 borrowed at 4.5% over 20 years, which returns a monthly payment of 1265.30 |
Compiled from the implementation of this tool and checked against it by itoolnet.
What Loan Calculator does not do
Knowing the edges of a tool saves more time than another list of its features. These are the cases where it will not do what you might expect.
- The rate is nominal by construction, divided by twelve with no adjustment. That is the right treatment for a rate quoted with monthly compounding, but an effective annual rate must be converted before you type it, and the page gives no hint that the distinction exists.
- Nothing other than principal and interest is in the model. There is no arrangement fee, no insurance, no property tax and no balloon or interest-only phase, so the "total paid" line describes the instalments rather than the full cost of the borrowing.
- No amortisation schedule is produced. How the payment splits between interest and principal in the first year as against the fifteenth cannot be seen, and with no field for overpayments the saving from paying extra each month cannot be estimated here.
Tested and documented by itoolnet, the team that builds and maintains this site.