Loan Calculator
The Loan Calculator works out your monthly payment, the total interest and the total amount you will repay for a fixed-rate, amortizing loan. Enter the loan amount, the annual interest rate and the loan term, and it shows what you pay each month and what the loan costs overall. It suits personal loans, car loans, education loans, home loans and business loans where payments are fixed and spread evenly over the term.
Loan Calculator
The total amount you plan to borrow.
The annual interest rate.
How long you will repay the loan.
What the result means
The monthly payment is the fixed amount you pay each month. Total interest is the extra cost of borrowing on top of what you borrowed. Total payment is everything you will pay back — the principal plus all the interest. All figures appear in the currency you select.
How to use this calculator
- 1Enter the loan amount you plan to borrow.
- 2Enter the annual interest rate as a percentage (for example 9 for 9% per year).
- 3Enter the loan term in years (for example 15 for fifteen years).
- 4Choose the currency you want the results shown in, if it is not already selected.
- 5Press Calculate to see the monthly payment, total interest and total repayment.
- 6Change the interest rate or term and recalculate to compare scenarios.
The formula
For a standard amortizing loan, the monthly payment is found with the formula below. It converts your annual rate to a monthly rate and your term in years to the number of monthly payments.
What each variable means
| Symbol | Name | Description |
|---|---|---|
| P | Loan amount | The principal you borrow. Interest is calculated on the remaining balance, not the original amount for every payment. |
| r | Monthly rate | The annual interest rate divided by 12 and 100 (for example 9% ÷ 12 = 0.75% = 0.0075). |
| n | Number of payments | The loan term in months, equal to years × 12. |
Step-by-step example
Example: 5,00,000 at 8% for 5 years
- 1Monthly rate = 8% ÷ 12 = 0.6667% = 0.006667
- 2Number of payments = 5 years × 12 = 60
- 3Monthly payment = 5,00,000 × 0.006667 × (1.006667)^60 ÷ ((1.006667)^60 − 1) ≈ 10,138.20
- 4Total repayment = 10,138.20 × 60 ≈ 608,291.83
- 5Total interest = 608,291.83 − 5,00,000 ≈ 108,291.83
Result
Monthly payment ≈ 10,138.20. The amounts appear in your selected currency.
What changes the result
- A higher interest rate raises both the monthly payment and the total interest.
- A longer term lowers the monthly payment but increases the total interest.
- A shorter term raises the monthly payment but reduces the total interest.
- Increasing the loan amount raises the monthly payment and total interest roughly in proportion.
Edge cases to be aware of
Unusual situations handled correctly
- Zero interest rate: the calculator model handles it as principal ÷ months, but the form requires a rate of at least 0.1% per year, so a true 0% cannot be entered.
- Zero or very small loan amounts: the form requires a loan amount of at least 1,000.
- Decimal amounts and rates work normally — for example a 6.5% rate or a 5,00,500 loan amount.
- Very short terms (such as 0.5 years) and very long terms (up to 40 years) are supported; a longer term can make total interest exceed the principal.
Common mistakes
Avoid these errors
- Using the annual rate instead of the monthly rate in the formula.
- Entering the term in months when the input expects years.
- Forgetting that taxes, fees, insurance and prepayment charges are not included in this estimate.
Assumptions
- Fixed interest rate for the entire term.
- Equal monthly payments throughout the loan.
- Monthly compounding, which is the standard model for this kind of loan.
- No prepayment, restructuring or changes to the rate partway through.
Limitations
- Does not include processing fees, origination fees, insurance or taxes.
- Does not model floating or adjustable rates, where payments can change.
- Does not provide amortization schedules — it is a total-cost estimate, not a payment-by-payment breakdown.
- This is an estimate for planning, not a loan quote.
Key terms to know
Loan principal+
Monthly payment+
Interest rate+
Total interest+
Total repayment+
Installment loan+
Amortization+
Fixed vs variable rate+
Real-world scenarios
Comparing two tenures
A 10,00,000 loan at 9%: one borrower picks 5 years, another picks 15 years.
What it means: The 5-year loan has a much higher monthly payment but far lower total interest. The 15-year loan is cheaper each month but can cost several lakhs more overall. There is no universal 'right' answer — it depends on cash flow.
Rate difference of 1%
Two lenders offer the same 10,00,000 loan over 10 years at 8% and 9%.
What it means: The 1% difference changes the monthly payment modestly but can add up to a meaningful amount of total interest over the full term. This is why comparing APRs and total cost matters, not just the headline monthly figure.
Borrowing the minimum
You need 5,00,000 but only borrow 4,00,000 by adjusting your budget.
What it means: Borrowing less reduces both the monthly payment and total interest. Even a smaller reduction in the loan amount can meaningfully lower the overall cost of borrowing.
Extra principal payments
You add a one-time lump sum to the principal after the first year.
What it means: Extra principal payments reduce the balance faster, which shortens the term and cuts total interest. Since interest is calculated on the remaining balance, early extra payments have the largest effect.
Related concepts
A loan calculator focuses on the total cost and monthly payment for any loan. The EMI calculator shows the same idea with a detailed principal-versus-interest breakdown and a balance-over-time chart.
The percentage you pay on a loan is the mirror of the percentage you can earn on an investment. Comparing them helps you decide whether to borrow or save.
For very short terms, simple and compound interest behave almost identically. For long loans, the compounding that happens inside each monthly payment matters.
Using a growth calculator to build a down payment reduces the amount borrowed and the lifetime interest cost.
What this estimate includes
| Cost item | Included | Description |
|---|---|---|
| Principal repayments | Included | The part of each payment that reduces what you originally borrowed. |
| Interest on the balance | Included | The cost of borrowing, based on the remaining balance each month. |
| Processing or origination fees | Not included | One-time charges lenders often add to the principal or deduct from the disbursed amount. |
| Insurance | Not included | Optional loan protection cover that lenders sometimes require. |
| Prepayment penalties | Not included | Fees for paying off part or all of the loan ahead of schedule. |
| Late payment fees | Not included | Additional charges when an installment is missed or delayed. |
Frequently asked questions
How is a loan payment calculated?+
How much interest will I pay on a loan?+
What is the difference between principal and interest?+
Does a longer loan term increase total interest?+
What happens if the interest rate is 0%?+
Is a loan calculator the same as an EMI calculator?+
Does the calculation include fees or taxes?+
What is loan amortization?+
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