How to use
Enter the amount borrowed, a fixed nominal annual interest rate and the repayment term. Choose months or years; the duration must equal a whole number of monthly payments. A 0% rate is supported. Use the borrowing amount and rate that belong to the same proposed agreement.
Expand the schedule to inspect payments, interest, principal and remaining balance. Currency selection labels the amounts without changing them. This tool estimates a regular reducing-balance loan, not whether a borrower can afford it.
Calculation method
Monthly rate r = nominal annual percentage rate / 1,200. For principal P and n months, the annuity payment at a positive rate is P × r / (1 − (1 + r)^−n). At 0%, the initial payment calculation is P / n.
The regular payment rounds to cents. Each month’s interest on the opening balance rounds to cents as well; the rest of that payment reduces principal. The last payment adjusts to clear the remaining principal and final interest. Totals are sums of those modeled schedule rows, not simply regular payment × requested term.
Worked example
For 10,000 at 6% over 36 months, the regular payment is 304.22. Under this tool’s monthly rounding rule, the last payment is 304.18, total paid is 10,951.88 and interest is 951.88. At 0%, borrowing 100 over three months produces 33.33, 33.33 and 33.34, totaling exactly 100.
Limits of the estimate
The model excludes fees, taxes, insurance, extra repayments, payment dates, daily accrual, changing rates and interest-only periods. Do not automatically substitute a full APR that includes charges for the nominal accrual rate. A bank’s schedule can differ because its date and rounding rules differ.
If cent rounding would create a zero payment or a payment that cannot reduce principal, the combination is rejected rather than hiding a large final balloon payment. Very small amounts can pay off before the requested term when the rounded payment clears the balance.
Compare growth arithmetic with the compound interest calculator and inspect rate changes with the percentage calculator.
For the measurement and planning details, read loan payments: nominal rates, interest and the final instalment.