Simple Loan Calculator

What is a Simple Loan Calculator?

A Simple Loan Calculator helps you estimate your monthly loan payments and total interest costs. By entering the loan amount, interest rate, and loan term, you can quickly see what your budget needs to accommodate for a car loan, personal loan, or any other fixed-rate installment loan. The calculator uses the standard amortization formula to compute your regular payment, then breaks down each payment into principal and interest portions. For vehicle-specific loans, try our Auto Loan Calculator.

How to Use the Simple Loan Calculator

Using this calculator is straightforward. Enter the total amount you plan to borrow, the annual interest rate offered by your lender, and the length of the loan in either years or months. The calculator instantly shows your estimated monthly payment, total amount paid over the life of the loan, and the total interest you will pay. A full amortization schedule is also generated so you can see exactly how much of each payment goes toward principal versus interest.

Loan Payment Formula

The monthly payment for a fixed-rate loan is calculated using the standard amortization formula:

M = P x [i(1 + i)^n] / [(1 + i)^n - 1]

Where M is the monthly payment, P is the principal loan amount, i is the monthly interest rate (annual rate divided by 12), and n is the number of monthly payments (loan term in years multiplied by 12).

Example Calculation

Suppose you take out a $20,000 personal loan at a 6% annual interest rate for 5 years. The monthly interest rate is 0.5% (6% / 12). With 60 monthly payments, the formula yields a monthly payment of approximately $386.66. Over the full term, you would pay a total of $23,199.60, of which $3,199.60 is interest.