How it works
This model assumes a fixed annual nominal interest rate, divided by 12 for the monthly rate, and equal end-of-month payments. P is the principal, r the monthly rate, and n the payment count. At zero interest, divide the principal by the number of payments. Fees, taxes, insurance, and variable rates are excluded.
payment = P × r / (1 − (1 + r)⁻ⁿ)Worked example
A 10,000 loan at 6% over 3 years has 36 payments of about 304.22. Total interest is about 951.90 before fees; unrounded payments are used for totals.
Frequently Asked Questions
Does this include bank fees?
No. Add fees separately when comparing the complete borrowing cost.
Is the entered rate APR?
Enter a nominal annual interest rate. APR may include fees and cannot always be used as the payment rate.
What happens at zero interest?
The monthly payment is principal divided by the number of months, with zero interest.
Are early repayments included?
No. This estimate assumes the original balance and term with no extra payments.