Loan interest calculator
This loan interest calculator shows exactly how much interest you will pay over the life of a loan, and how each payment splits between interest and principal.
Amortization schedule
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | $4,101.10 | $2,199.50 | $20,898.90 |
| 2 | $4,508.15 | $1,792.45 | $16,390.75 |
| 3 | $4,955.56 | $1,345.04 | $11,435.19 |
| 4 | $5,447.39 | $853.21 | $5,987.80 |
| 5 | $5,987.80 | $312.55 | $0.00 |
How lenders arrive at the interest
Interest each month is the balance times the monthly rate. Total interest equals the sum of those amounts across all payments, and it is the difference between what you repay and what you borrowed. The table below shows how a different rate or term changes that total.
$25,000 at 9.5% by loan length
Borrowing $25,000 at 9.5% over 5 years costs $525.05 a month and $6,503 in interest, $31,503 in total. Shorter terms raise the payment but cut the interest, and longer terms do the reverse. The table shows the trade-off across common terms.
| Term | Monthly payment | Total interest | Total paid |
|---|---|---|---|
| 12-month | $2,192.09 | $1,305 | $26,305 |
| 2-year | $1,147.86 | $2,549 | $27,549 |
| 3-year | $800.82 | $3,830 | $28,830 |
| 4-year | $628.08 | $5,148 | $30,148 |
| 5-year | $525.05 | $6,503 | $31,503 |
| 7-year | $408.60 | $9,322 | $34,322 |
| 10-year | $323.49 | $13,820 | $38,820 |
How your rate changes the cost
Personal loan rates vary widely with credit score, from the mid single digits for strong borrowers to 30% or more for weak credit. On $25,000 over 5 years, moving from 9.5% to 12.5% adds $2,244 in interest.
| APR | Monthly payment | Total interest |
|---|---|---|
| 6.5% | $489.15 | $4,349 |
| 8% | $506.91 | $5,415 |
| 9.5% | $525.05 | $6,503 |
| 11% | $543.56 | $7,614 |
| 12.5% | $562.45 | $8,747 |
Where the interest goes
In the first year of this $25,000 loan you pay $2,200 in interest, 35% of everything you pay that year. Interest is calculated on the balance each month, so it shrinks as you pay the loan down.
How much can you borrow for a given payment?
Working backwards at 9.5% over 5 years, here is the loan size each monthly payment supports.
| Monthly payment | Loan amount |
|---|---|
| $200/month | $9,523 |
| $300/month | $14,284 |
| $400/month | $19,046 |
| $500/month | $23,807 |
When is half of a $25,000 loan repaid?
With a $525.05 payment, the balance falls below half ($12,500) after 34 payments, about 2.8 years into a 5 years loan. Because interest is highest at the start, the second half of the loan is paid down much faster than the first.
| After | Balance left | Paid so far |
|---|---|---|
| 1 year | $20,899 | $6,301 |
| 2 years | $16,391 | $12,601 |
| 3 years | $11,435 | $18,902 |
Frequently asked questions
How is a loan payment calculated?
The payment is principal × r ÷ (1 − (1 + r)^−n), where r is the monthly rate (APR ÷ 12) and n is the number of months. Each payment covers that month’s interest first, and the rest reduces the balance.
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the money. APR also includes certain fees, so it is the better number for comparing offers. This calculator treats the rate you enter as the rate that accrues on the balance.
Will extra payments save interest?
Yes, if your lender applies them to principal and charges no prepayment penalty. Use the extra payment field to see the effect.
Does this calculator store my data?
No. Everything runs in your browser. Nothing is sent to a server.
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Estimates from standard loan formulas, not a loan offer or financial advice. Example rates are assumptions: use your own quote.