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Loan calculator

Enter the amount borrowed, the annual interest rate and the term in years to see the monthly payment, what you pay in total and how much of that is interest.

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How it works

The monthly payment comes from the standard amortising-loan formula M = P × i ÷ (1 − (1 + i)^−n), where P is the amount borrowed, i is the annual rate divided by 100 and then by 12 (a monthly rate) and n is the number of monthly payments. Early payments are mostly interest and later ones are mostly principal, which is why the total you repay is higher than the amount you borrowed. The calculation assumes a fixed rate for the whole term, the same payment every month, no missed payments and no fees, insurance or early-repayment charges.

Worked example

Borrowing 10,000 at 6% a year over 5 years: i = 0.06 ÷ 12 = 0.005 and n = 60. The payment is 10,000 × 0.005 ÷ (1 − 1.005^−60) = 193.33. Sixty payments of 193.33 make 11,599.80 in total, so the interest is 1,599.80.

Questions and answers

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