# Loan calculator

URL: https://shahid09.is-a.dev/tools/loan-calculator/
Author: Muhammad Shahid (https://shahid09.is-a.dev/)
Free tool · runs in your browser

Work out the monthly payment and total interest on any loan, and see how extra payments cut the cost.

**Quick answer:** The monthly payment (EMI) is P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where P is the loan amount, r the monthly rate (annual rate ÷ 12 ÷ 100) and n the number of months. So 100,000 at 10% for 12 months costs 8,791.59 a month and 5,499.06 in interest. Enter your figures for the full schedule, and add an extra payment to see the savings.

## How to use it

1. **Enter the loan details.** Amount, annual interest rate and term in years or months.
2. **Add an extra payment.** Optional: see how paying more each month shortens the loan.
3. **Check the schedule.** Open the month-by-month table of interest, principal and balance.

## Example

A loan of 100,000 at 10% a year for 12 months:

Input:

```
Loan amount: 100,000
Interest: 10%
Term: 12 months
```

Output:

```
Monthly payment (EMI): 8,791.59
Total interest: 5,499.06
Total repaid: 105,499.06
```

## Common errors and how to fix them

- **My bank quotes a different payment**: Banks may add fees or insurance, or use a different rate basis. Ask for the APR and the fee list.
- **The payment looks far too low**: Check that the term unit is right: 30 months and 30 years differ a great deal.

## Frequently asked questions

### What is EMI?

Equated Monthly Instalment: a fixed monthly payment covering both interest and part of the loan. "EMI" is the term used in India and Pakistan; elsewhere it is simply the monthly payment.

### Why do early payments go mostly to interest?

Interest is charged on the remaining balance, which is highest at the start. As the balance falls, more of each payment reduces the loan.

### How much do extra payments save?

Often a lot, as they cut the balance that interest is charged on. Enter an amount in the extra payment field to see your total interest and new end date.

### What is the difference between interest rate and APR?

The interest rate is the cost of borrowing the money. APR also includes most fees, so it is the better number for comparing offers.

### Does it work for car loans and mortgages?

Yes, for any fixed-rate loan with equal monthly payments. Mortgages often add insurance and property taxes, which are not included.

### What about a 0% loan?

The payment is simply the loan amount divided by the months. Check for fees, which are how many 0% offers make money.

### Does it work for variable-rate loans?

Only as an estimate at today's rate. The real payment will change as the rate changes.

### Does it work for flat-rate or Islamic financing?

No. Flat-rate loans charge interest on the original amount, and Islamic products such as murabaha use a different structure. Use the figures your provider gives you.

### How do I compare two loan offers?

Run each offer here and compare total interest and total repaid, not only the monthly payment. A longer term lowers the payment but usually costs more overall.

### How much of my income should go to loan payments?

A common guideline is to keep total debt payments under about 35 to 40% of income, though lenders differ. The [percentage calculator](https://shahid09.is-a.dev/tools/percentage-calculator/) can show your share.

## Related

- [Percentage calculator](https://shahid09.is-a.dev/tools/percentage-calculator/)
- [Discount calculator](https://shahid09.is-a.dev/tools/discount-calculator/)
- [GST calculator](https://shahid09.is-a.dev/tools/gst-calculator/)

## Sources

- [CFPB: Interest rate and APR](https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-a-loan-interest-rate-and-the-apr-en-733/)
- [Wikipedia: Amortization calculator](https://en.wikipedia.org/wiki/Amortization_calculator)