💰 Finance
Interest Calculator
Use this free interest calculator to get fast, accurate results.
📝 Your Assumptions
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This interest calculator turns any loan amount, rate, and term into a clear monthly payment, total interest, and total paid figure. Use it before signing an auto loan, personal loan, or mortgage to see exactly what borrowing costs. It's built for anyone who wants the real numbers in seconds, not a sales pitch.
How to Use This Calculator
Three inputs give you the full cost of borrowing in under a minute.
1
Enter Your Loan Amount
Type the amount you plan to borrow, such as $25,000 for a new car or $350,000 for a home. This is the principal before any interest is added. If you're paying $2,000 in fees upfront, enter the amount actually financed, like $23,000.
2
Add Your Interest Rate
Enter the annual percentage rate (APR) your lender quoted, like 6.5% or 18.9%. Use the APR, not the base rate, because APR includes lender fees. A 1% difference on a $30,000 loan over 5 years changes total interest by roughly $800.
3
Choose Your Loan Term
Select the number of years you'll take to repay, such as 3, 5, 15, or 30 years. Longer terms lower the monthly payment but raise total interest. A $300,000 loan at 7% costs about $1,996 monthly for 30 years versus $2,696 for 15 years.
4
Review Monthly Payment
The calculator shows what you'll owe every month, combining principal and interest. On a $20,000 loan at 8% for 5 years, that's $405.53 per month. Compare this to your budget before committing.
5
Check Total Interest and Total Paid
Total interest is the cost of borrowing; total paid is principal plus interest. A $20,000 loan at 8% over 5 years costs $4,331.80 in interest, for a total of $24,331.80. Run the same loan at 4% and interest drops to $2,099.80.
What Your Results Mean
Each output tells you something different about the true cost of your loan.
Monthly Payment
This is what leaves your bank account every month for the life of the loan. It stays fixed on a standard amortized loan, so a $15,000 loan at 7% for 4 years means $359.24 monthly, every month, until it's paid off.
Total Interest
This is the lender's fee for letting you borrow, spread across all your payments. On a $15,000 loan at 7% over 4 years, you pay $2,243.52 in interest — money that buys you nothing but time.
Total Paid
Add principal and interest and you get the full out-the-door cost. That $15,000 loan actually costs $17,243.52. Compare this number across loan offers, not the monthly payment.
Rate vs. Term Trade-Off
Stretching a $25,000 loan from 5 years to 7 years at 6% drops the monthly payment from $483.32 to $365.24, but total interest jumps from $3,999.20 to $5,680.16. Lower payments cost more overall.
Amortization Front-Loading
Early payments are mostly interest, not principal. On a $200,000 mortgage at 6.5% for 30 years, the first payment of $1,264.14 sends $1,083.33 to interest and only $180.81 to principal.
APR vs. Interest Rate
The rate drives the math here, but APR adds lender fees and gives the truer cost. A 6% rate with $3,000 in fees on a $200,000 loan behaves more like a 6.3% loan, adding thousands over 30 years.
Key Terms
Principal
The original amount you borrowed, before any interest is added. On a $20,000 auto loan, the principal is $20,000 and interest is charged on top of it.
Interest Rate
The annual percentage a lender charges on the outstanding balance. A 7% rate on a $10,000 balance costs about $700 in interest over a full year if nothing is paid down.
Amortization
The schedule of splitting each payment between interest and principal until the loan hits zero. Early payments are interest-heavy; later payments are principal-heavy.
APR (Annual Percentage Rate)
The interest rate plus lender fees, expressed as one yearly percentage. It's usually higher than the advertised rate and is the better number for comparing offers.
Loan Term
The length of time you have to repay the loan, usually measured in years or months. A 5-year term means 60 monthly payments; a 30-year mortgage means 360.
❓ Frequently Asked Questions
The calculator uses the standard amortization formula: M = P × [r(1+r)^n] / [(1+r)^n − 1], where P is principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments. For a $25,000 loan at 6% for 5 years, r is 0.005 and n is 60. Plugging in gives M = $483.32 per month. Over 60 payments that's $28,999.20 total, meaning $3,999.20 in interest. Notice that the payment is fixed even though the interest portion shrinks each month — the first payment sends $125 to interest and $358.32 to principal, while the last payment sends about $2.41 to interest and $480.91 to principal. If you want to see how extra payments change that schedule, run the numbers here first, then compare against our loan-calculator to test different payoff strategies.
The interest rate is what the amortization math uses to set your monthly payment. APR bundles that rate with lender fees — origination charges, points, mortgage insurance — so it reflects the true annual cost. Say you borrow $200,000 at a 6% rate for 30 years with $3,000 in fees. The monthly payment based on the 6% rate is $1,199.10. But because you effectively received $197,000 while repaying $200,000 plus interest, the APR comes out closer to 6.14%. That 0.14% gap adds roughly $6,000 in extra cost over 30 years. When comparing two lenders, the one with the lower rate but $5,000 in fees can cost more than the one with a slightly higher rate and no fees. Always ask for the APR in writing. Our mortgage-calculator lets you model both scenarios side by side.
A longer term lowers your monthly payment but raises total interest, often dramatically. Take a $30,000 auto loan at 7%. Over 3 years (36 payments), the monthly payment is $926.31 and total interest is $3,347.16. Over 5 years (60 payments), the payment drops to $594.04 but interest climbs to $5,642.40. Over 7 years (84 payments), the payment falls to $452.85 and interest hits $8,039.40 — more than double the 3-year cost. The monthly savings feel good, but you're renting money for four extra years. A useful rule: every extra year on a 5-year, $30,000 loan at 7% adds roughly $1,200 to $1,500 in interest. If cash flow allows, the 3-year term is far cheaper. Use this calculator to compare 3, 5, and 7-year terms before you sign, and check the auto-loan-calculator for trade-in and down-payment scenarios.
Interest is charged on the remaining balance, so when the balance is highest, the interest portion is largest. On a $250,000 mortgage at 6.5% for 30 years, the monthly payment is $1,580.17. The first payment sends $1,354.17 to interest and only $226 to principal. By year 15, the balance is down to about $187,000, so the interest portion of that same $1,580.17 payment is roughly $1,013 and principal is $567. In the final year, almost the entire payment goes to principal. This front-loading is why paying extra early is so powerful: an extra $200 toward principal in month one saves you about $200 plus 30 years of interest on that $200, which compounds to roughly $1,300 saved. Even $50 extra per month on that mortgage can cut the term by 3 to 4 years. Model extra payments with our mortgage-calculator to see your exact savings.
Compare total paid, not monthly payment. Three lenders offer $15,000 for 4 years: Lender A at 6.5% APR, Lender B at 7.2% with a $200 fee, Lender C at 5.9% with a $500 origination fee. Lender A: $355.34/month, $17,056.32 total. Lender B: $360.79/month, $17,517.92 total. Lender C: $351.34/month, but the $500 fee means you only receive $14,500, effectively making the true cost $17,364.32. Lender A wins despite not having the lowest rate or lowest payment. Always ask for the APR and the total finance charge in writing. Then enter each offer's rate, amount, and term into this calculator and compare the Total Paid line. The lowest monthly payment is often the most expensive loan. For larger purchases, cross-check with our loan-calculator to factor in fees and down payments.
Rates vary by loan type and your credit score. As of recent US market conditions, 30-year fixed mortgages sit around 6.5% to 7.5%, 15-year fixed around 5.8% to 6.8%, new auto loans around 6% to 8% for excellent credit (10%+ for subprime), used auto loans 7% to 11%, and personal loans 10% to 25% depending on creditworthiness. A 100-point credit score difference can move your auto rate by 2 to 3 percentage points. On a $25,000, 5-year auto loan, going from 9% to 6% saves $2,100 in interest and drops the monthly payment from $518.96 to $483.32. Before shopping, check your credit score and get pre-approved so you know your real rate. Then enter that rate here to see the true monthly and total cost. Compare against the auto-loan-calculator or mortgage-calculator depending on what you're buying.
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