How to use the loan calculator
- Enter the amount you will borrow and pick your currency.
- Enter the yearly interest rate, for example 6.5.
- Enter the loan term in years or months.
Results update as you type. The schedule below shows how each payment splits between principal and interest.
The formula
For a loan amount P, a monthly rate r (yearly rate ÷ 12) and n monthly payments, the payment is P × r ÷ (1 − (1 + r)^−n). With a 0% rate it is simply P ÷ n.
Example
Borrowing $250,000 at 6.5% for 30 years costs about $1,580 a month. Over 360 payments you pay roughly $319,000 in interest, more than the loan itself. The same loan over 15 years costs about $2,178 a month but only about $142,000 in interest.
Ways to pay less interest
- Choose a shorter term if the monthly payment fits your budget.
- Make extra payments toward principal early in the loan, when the balance is highest.
- Compare rates: one percentage point on a 30-year loan changes total interest by tens of thousands.