How Does It Work?
- Enter the amount and the rateUse the annual interest rate quoted by the lender. If you were given an APR, that already includes most fees and gives a more realistic figure.
- Set the termYears or months, whichever the offer uses. A longer term lowers the monthly payment and raises the total cost.
- Try an extra paymentAdd anything you could pay on top each month and the calculator re-amortises the loan to show how much interest and time it saves.
What Is It Used For?
A repayment loan uses the standard amortisation formula: each month you pay interest on the outstanding balance and the rest reduces the principal, so early payments are mostly interest and later ones mostly capital. That is why the monthly figure alone is misleading — stretching a loan from five years to seven lowers the payment but can add thousands to the total.
- Comparing two loan or mortgage offers with different rates and terms.
- Checking what a car finance deal really costs over its life.
- Seeing how much a slightly shorter term would save in interest.
- Working out whether overpaying by a small amount each month is worth it.
- Sanity-checking a monthly payment a lender has quoted you.
Examples
| Amount | Rate | Term | Monthly | Total interest |
|---|---|---|---|---|
| 20,000 | 6.5% | 5 years | 391.32 | 3,479.36 |
| 20,000 | 6.5% | 7 years | 297.69 | 5,006.10 |
| 250,000 | 4.5% | 30 years | 1,266.71 | 206,016.78 |
| 10,000 | 0% | 2 years | 416.67 | 0.00 |