Loan Repayment Calculator
Estimate repayment amount, total repayments and total interest cost with a free calculator, clear formula notes, practical examples, common mistakes, FAQs and related finance calculators.
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Monthly loan repayment: inputs and result
Enter the amount borrowed, annual interest rate and term in years. This tool estimates a fixed monthly principal-and-interest repayment. It has no repayment-frequency selector, extra-payment input or fee field.
How the calculation works
The annual rate is divided by 12 and the term is converted to months. A level payment amortises the loan over that term. Total repaid is payment multiplied by the number of months; estimated interest is that total minus the original principal.
Formula and assumptions
For principal P, monthly rate r = annual percentage ÷ 1, 200 and n = years × 12: payment = P × r ÷ [1 − (1 + r)−n]. At a zero rate, payment = P ÷ n.
The rate and payment stay constant. Payments occur monthly; fees, balloon payments, daily interest conventions and extra repayments are excluded.
Using the fields
- Enter the loan principal, without a dollar sign.
- Enter the nominal annual interest percentage, such as 8 for 8%.
- Enter the term in years and calculate.
- Compare the estimate with the lender’s repayment schedule and fees.
Worked examples
$20, 000 over five years
At 8% a year, r = 0.08 ÷ 12 and n = 60. The formula gives $405.53 per month. Using the unrounded payment, total repaid is $24, 331.67 and interest is $4, 331.67. Paying the displayed rounded amount can leave a small final adjustment.
Zero interest
$12, 000 over two years means 24 payments: $12, 000 ÷ 24 = $500 a month, before fees.
Reading the result
A lower monthly payment can come from extending the term, which usually adds interest at a positive rate. This estimate does not assess eligibility or whether the payment fits a household budget.
Common mistakes
- Entering a comparison rate as though it were the contract interest rate.
- Reading the monthly result as a weekly or fortnightly payment.
- Expecting a fee-free model to match a loan with account fees or a balloon.
What is included
This is a fixed-rate, monthly amortisation model. Actual lender calculations, rounding, fees and repayment dates can differ. See Moneysmart’s personal loan cost and fee guidance when comparing offers.
Supporting guides for this calculator
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Frequently asked questions
Can I select fortnightly repayments?
This version calculates monthly repayments only. Dividing a monthly payment by two does not reproduce a fortnightly amortisation schedule.
Are extra repayments included?
No. The tool assumes the same scheduled monthly payment throughout the entered term.
Why is the lender’s quote different?
Fees, daily interest, payment dates, rounding, a different rate or a balloon can change the quoted repayment.
Using this calculation
Use the monthly estimate to compare the same principal and term at different rates, then check the contract repayment schedule and all fees.