What is the Loan Calculator?
The loan calculator works out the fixed monthly payment on an amortized loan, the kind used for most personal, car, home and business loans. It also shows the total interest you will pay, the month your loan ends, and how each payment is split between principal and interest.
The amortization schedule is the most useful part: in the early months most of each payment goes to interest, and over time more goes to the principal. Seeing this helps you decide whether a shorter term or extra payments are worth it. For car and home financing with a down payment, try the EMI Calculator.
How to use the Loan Calculator
- Enter the loan amount you want to borrow.
- Enter the annual interest rate (or markup rate) quoted by the bank.
- Enter the term in years and, if needed, extra months.
- Pick the month of your first payment.
- Read the monthly payment, total interest and payoff date, then open the Yearly or Monthly schedule.
Formula
Monthly payment = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
P is the loan amount, r is the annual rate divided by 12 (as a decimal) and n is the number of monthly payments. If the rate is 0%, the payment is simply P ÷ n.
Example
Borrowing Rs 1,000,000 at 14% a year for 5 years gives a monthly payment of about Rs 23,268. Over 60 months you repay Rs 1,396,095, so the total interest is about Rs 396,095.
Loan basics for borrowers
Interest rate and APR
The quoted rate is the yearly cost of borrowing. The APR also includes fees, so it is the better number for comparing banks.
Loan term
A longer term lowers the monthly payment but increases the total interest paid. A shorter term costs more each month but less overall.
Secured and unsecured loans
Car and home loans are secured by the asset, so rates are usually lower. Personal loans and credit cards are unsecured and cost more.
Islamic financing
Islamic banks charge rent or profit instead of interest (Ijarah, Diminishing Musharakah), but the monthly installment is worked out the same way.
How to pay less interest
- Borrow less by making a larger down payment.
- Choose the shortest term you can comfortably afford.
- Make extra principal payments when allowed; check for prepayment penalties.
- Compare offers using the total cost, not only the monthly payment.
- See how savings grow instead with the Compound Interest Calculator.
You may also need
People who use the Loan Calculator often need these related tools too:
- Age Calculator: Find your exact age in years, months and days from your date of birth, plus the total days, weeks and hours you have lived and how long until your next birthday. Useful for forms, admissions and job applications that ask for age on a specific date.
- Percentage Calculator: Four percentage calculators on one page: X% of Y, X is what percent of Y, percentage increase or decrease, and adding or removing a percentage. Ideal for marks, discounts, salary raises and price changes.
Frequently asked questions
How is a monthly loan payment calculated?
It uses the amortization formula P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where P is the amount, r the monthly rate and n the number of payments.
What is an amortization schedule?
A table showing every payment, how much of it is interest and principal, and the balance left after each one.
Does a longer loan term save money?
No. It lowers the monthly payment but you pay interest for longer, so the total cost goes up.
Can I use this for a home loan or mortgage?
Yes. Enter the amount financed after your down payment, the annual rate and the term in years.
Why does most of my early payment go to interest?
Interest is charged on the balance. The balance is highest at the start, so early payments are mostly interest.
Are bank fees included?
No. Processing fees, insurance and taxes are extra, so ask your bank for the full cost or APR.
Is the Loan Calculator free to use?
Yes. The Loan Calculator on Custom Converter is completely free, with no sign-up, no daily limit and no watermark.
Does the Loan Calculator work on mobile phones?
Yes. It is built mobile-first and works on Android phones, iPhones, tablets and computers in any modern browser, with no app to install.