Loan Calculator

This loan calculator helps you plan a loan before you commit to one. Enter the amount, interest rate, and term — and instantly see the monthly payment, total interest, and full repayment schedule. You can also work backwards: set a monthly budget to find the maximum loan you can afford, or enter a payment and a rate to find out how long the debt will run. Use the early repayment section to model extra payments and see exactly how much they cut from the total cost.

What is a loan and how does it work?

A loan is a financial arrangement where a lender — typically a bank or credit union — provides a sum of money to a borrower, who agrees to repay it with interest over an agreed period. The lender earns profit from the interest charged; the borrower gets access to money they don't currently have.

Every loan breaks down into three core numbers: the principal (the amount borrowed), the interest rate (the annual cost of borrowing, expressed as a percentage), and the term (how long you have to repay). Changing any one of them shifts all the others — which is exactly what this calculator is built to explore.

Annuity vs. differential payments

Before running the numbers, it helps to understand the two repayment structures most lenders offer.

• Annuity

  The payment amount is fixed for the entire term. In early months, most of it goes toward interest; over time, more and more goes toward the principal. The bank gets the bulk of its interest income upfront.

  Predictable, easy to budget — but total interest is higher.

• Differential

  The principal is split equally across all months. The interest portion shrinks each month as the balance falls, so the payment decreases over time. The first payment is the largest.

  Costs less overall — but demands higher income at the start.

For the same loan amount, rate, and term, a differential schedule will always result in less total interest paid. However, the first few payments can be significantly larger than an equivalent annuity payment, which is why annuity remains more popular — most people prefer the certainty of a fixed monthly bill.

How early repayment changes the picture

Making extra payments toward the principal is one of the highest-return financial moves available to a borrower. Because interest is calculated on the remaining balance, reducing that balance early cuts off future interest accumulation at the root.

When you make an early repayment, you typically choose between two outcomes:

• Shorten the term — the monthly payment stays the same, but the loan ends earlier. This saves the most interest because the high-balance period is cut short.
• Reduce the monthly payment — the term stays the same, but each subsequent payment is smaller. This improves monthly cash flow but saves less interest overall.

As a rule of thumb, shortening the term is mathematically superior if your goal is to minimize total cost. Reducing the payment makes more sense if freeing up monthly budget is the priority.

The real cost of a loan: what to watch out for

The interest rate alone does not tell the full story. Banks may attach mandatory fees, insurance premiums, or account charges that raise the actual cost of borrowing well above the headline rate. Always ask for the APR (Annual Percentage Rate), which by law in most countries must include all compulsory costs — not just interest.

Another number worth tracking is the total amount repayable: the sum of every payment you'll make from start to finish. The difference between that figure and the original loan amount is the real price you pay for borrowing the money.

How much can you safely borrow?

A widely used guideline among personal finance advisors is the debt-to-income ratio (DTI): the share of your net monthly income that goes toward debt repayments. A DTI below 30% is generally considered comfortable; above 40%, financial stress becomes a real risk if income dips unexpectedly.

Use the max loan amount mode in the calculator to find the upper limit given your budget, then deliberately borrow less — leaving a buffer is always wise.