Loan Interest Calculator
See what a loan really costs — the payment, the total interest over the full term, the split between principal and interest, and the APR once fees are counted.
Assumes a simple-interest, fixed-rate loan with equal payments. Taxes, insurance and late fees are not included. For planning purposes only.
| Rate | Payment | Total Interest | Total Paid | vs Your Rate |
|---|
For your $25,000 loan over 60 payments. Half a point is worth shopping for.
How to use the loan interest calculator
Four quick steps show what a loan really costs — the payment, the total interest over the full term, the split between principal and interest, and the APR once fees are counted.
Enter the loan & term
Amount borrowed, and how long you have to repay it in years and months.
Set the rate & schedule
The quoted rate, how often you pay, and any extra principal you’d add.
Add the fees
Origination fee and any other closing costs — this is what moves the APR.
Read the true cost
Total interest, effective APR, payoff time, and a rate comparison you can download.
This assumes a simple-interest loan. Interest is recalculated on your remaining balance each period, which is how most mortgages, auto loans, and personal loans work. Loans using precomputed interest fix the finance charge at signing, so paying early saves little — check your loan agreement before planning around extra payments.
How loan interest is calculated
Interest is rent on the balance you still owe. Each period the lender charges the rate against that balance, your payment covers it, and whatever is left knocks the balance down — which makes the next charge smaller. Here is the exact math.
Worked example — 25,000 borrowed at 7.5% over 60 monthly payments, 1% origination fee
Periodic rate: 7.5% ÷ 12 = 0.625%
Payment: 25,000 × 0.00625 ÷ (1 − 1.00625⁻⁶⁰) ≈ 500.95
Interest in payment one: 25,000 × 0.00625 = 156.25
Total interest: ≈ 5,057 · Total paid: ≈ 30,057
Fee: 1% of 25,000 = 250, so you receive 24,750
≈ 5,057 in interest — about 20 cents per dollar borrowed — and an effective APR of 7.92% once the fee is counted, for a total cost of credit of 5,307.
Loan interest charts
Handy lookups for the questions people ask most — what a rate difference is worth, what the term costs you, how fees move the APR, and what extra payments buy. Figures use a 25,000 loan at 7.5% over 60 monthly payments unless noted.
| Rate | Payment | Total interest | Total paid | vs. 7.5% |
|---|---|---|---|---|
| 5.50% | 477.53 | 3,652 | 28,652 | −1,405 |
| 6.50% | 489.15 | 4,349 | 29,349 | −708 |
| 7.50% | 500.95 | 5,057 | 30,057 | — |
| 8.50% | 512.91 | 5,775 | 30,775 | +718 |
| 9.50% | 525.05 | 6,503 | 31,503 | +1,446 |
About 710 of interest per percentage point on this loan — roughly 355 for the half point that separates most competing offers. The payment barely moves, which is exactly why comparing payments instead of total cost is misleading.
| Term | Payment | Total interest | Total paid |
|---|---|---|---|
| 2 years | 1,124.99 | 2,000 | 27,000 |
| 3 years | 777.66 | 2,996 | 27,996 |
| 4 years | 604.47 | 4,015 | 29,015 |
| 5 years | 500.95 | 5,057 | 30,057 |
| 6 years | 432.25 | 6,122 | 31,122 |
| 7 years | 383.46 | 7,210 | 32,210 |
Term moves total cost far more than rate does — seven years costs more than three times what two years costs. Per 1,000 borrowed at 7.5%, interest runs about 80 over two years, 202 over five, and 288 over seven.
| Origination fee | Fee amount | Cash you receive | Effective APR | Total cost of credit |
|---|---|---|---|---|
| None | 0 | 25,000 | 7.50% | 5,057 |
| 1% | 250 | 24,750 | 7.92% | 5,307 |
| 2% | 500 | 24,500 | 8.36% | 5,557 |
| 3% | 750 | 24,250 | 8.79% | 5,807 |
| 5% | 1,250 | 23,750 | 9.69% | 6,307 |
| 8% | 2,000 | 23,000 | 11.08% | 7,057 |
Roughly 0.43 points of APR per 1% of origination fee on a five-year loan. This is why a 7.5% loan with a 5% fee is worse than a 9% loan with none — and why the APR, not the quoted rate, is the number to compare.
| Extra per payment | Payment | Payoff time | Total interest | Interest saved |
|---|---|---|---|---|
| None | 500.95 | 5 yr | 5,057 | — |
| 25 | 525.95 | 4 yr 9 mo | 4,758 | 299 |
| 50 | 550.95 | 4 yr 6 mo | 4,493 | 564 |
| 100 | 600.95 | 4 yr 1 mo | 4,043 | 1,014 |
| 200 | 700.95 | 3 yr 5 mo | 3,374 | 1,683 |
Adding 100 a payment saves more interest than shaving a full point off the rate. It only works on simple-interest loans, and only if the servicer applies the extra to principal rather than holding it against next month’s payment.
| Schedule | Payments | Payment | Paid per year | Total interest |
|---|---|---|---|---|
| Monthly | 60 | 500.95 | 6,011 | 5,057 |
| Semi-monthly | 120 | 250.15 | 6,004 | 5,018 |
| Biweekly | 130 | 230.89 | 6,003 | 5,015 |
| Weekly | 260 | 115.38 | 6,000 | 4,998 |
Worth understanding clearly: because the term stays at five years, paying more often saves only about 42 in interest, not thousands. The big biweekly savings people hear about come from accelerated schedules that squeeze 13 monthly payments into a year — model that by keeping monthly payments and adding extra principal instead.
cost per dollar
time charged
lift the APR
Three things set what a loan costs, and they don’t pull equally — the term usually matters more than the rate, while fees hide in the gap between the quoted rate and the APR.
- Rate — what each dollar of balance costs you per year.
- Term — how long you carry the balance, and so how many charges you face.
- Fees — taken from the cash you receive, so you repay more than you got.
Everything the calculator works out
One loan, one rate, and one schedule gives you the full cost picture — including the number lenders would rather you didn’t compare on.
Key figures behind loan interest
Built for any borrowing decision
Auto loans, personal loans, home improvement financing, or a business note — the same math prices all of them, and the same three levers move the total.
Has competing loan offers with different rates and fees, and needs a like-for-like comparison rather than two payment figures.
- Enter each offer’s fees, not just the rate
- Compare on effective APR
- Check total paid, not the payment
Deciding how long to stretch the loan, and weighing a comfortable payment against what the extra years actually cost.
- Price two or three terms side by side
- Watch total interest, not monthly
- Consider a longer term plus extra
Already borrowing and wondering whether rounding up the payment is worth the effort, and whether the loan even allows it.
- Test a few extra amounts
- Confirm it’s simple interest
- Ask about prepayment penalties
7 tips for paying less loan interest
A few habits cut the cost of borrowing — and keep you from comparing the wrong numbers.
Loan interest calculator FAQ
The rate, APR, term, and early-payoff questions people ask most before signing a loan agreement.
On a simple-interest loan, each period’s interest is the balance you still owe multiplied by the rate divided by the number of payments a year. Whatever is left of your payment goes to principal, which lowers the balance and therefore lowers next period’s interest.
On a 25,000 loan at 7.5% paid monthly, the first payment carries 156.25 of interest — 25,000 times 7.5% divided by 12. The payment stays at about 501 throughout, but the interest portion shrinks every month while the principal portion grows.
The interest rate is what you are charged on the balance. The APR is the rate that reflects the loan’s fees as well, which is why it is the number you should compare offers on.
A 25,000 loan at 7.5% over five years with a 1% origination fee carries an effective APR of about 7.92%, because you only receive 24,750 while still paying the full schedule. At an 8% fee the same 7.5% loan has an APR above 11%.
Because interest is charged on the balance, and the balance is at its highest at the start. Your payment stays the same each period, so the fixed amount covers a large interest charge early and a small one later.
That is also why extra principal is worth so much more early in the loan than late. A dollar paid in month one removes interest for every remaining month, while the same dollar in the final year removes almost none.
At 7.5% over five years of monthly payments, a 25,000 loan costs about 5,057 in interest — roughly 20 cents for every dollar borrowed — with a payment near 501 and about 30,057 paid back in total.
The term matters more than most people expect. The same loan over two years costs about 2,000 in interest, and over seven years about 7,210. A 1% origination fee adds another 250 on top of whichever you choose.
Only on simple-interest loans, where interest is recalculated on the balance each period. Most mortgages, auto loans, and personal loans work this way, and extra principal reduces both the interest and the term.
Some loans use precomputed interest, where the total finance charge is fixed at signing. Paying early on one of those saves little or nothing, and any rebate follows a formula such as the Rule of 78s rather than actual balances. Confirm which type you have before starting a payoff plan.
In total interest, almost always — a 25,000 loan at 7.5% costs about 2,000 over two years versus about 7,210 over seven. The trade-off is the payment, which rises from about 501 on a five-year term to about 1,125 on a two-year term.
The risk of choosing the shortest term you can just about afford is that it leaves no slack. A slightly longer term with extra principal payments gives you most of the saving while keeping the required payment low if money gets tight.
Only slightly, if the term stays the same. Splitting a five-year loan into 130 biweekly payments rather than 60 monthly ones saves about 42 in interest on a 25,000 loan at 7.5%, because you are paying a little sooner within each month, not paying more overall.
The large savings people associate with biweekly payments come from accelerated schedules, where 26 half-payments a year add up to 13 monthly payments instead of 12. To model that here, keep monthly payments and enter the extra amount as extra principal instead.
An origination fee is a charge for setting up the loan, usually a percentage of the amount borrowed, and it is typically deducted from the funds you receive rather than added to your payment. Borrow 25,000 with a 1% fee and you get 24,750 while repaying the full 25,000 schedule.
Whether it is worth paying depends entirely on the rate that comes with it. A loan with a fee and a lower rate can beat a fee-free loan at a higher rate, which is exactly the comparison the APR is designed to settle.
General Estimating Notice: This calculator models a fixed-rate, simple-interest loan with equal payments, using the amount, rate, term, payment frequency, extra principal, and fees you enter. It assumes every extra dollar is applied to principal immediately and that no prepayment penalty applies. Loans using precomputed interest, variable rates, deferred interest, or irregular payment schedules will behave differently. The effective APR shown counts only the fees you enter — a lender’s disclosed APR under the Truth in Lending Act may include other charges and may be calculated on slightly different conventions. Taxes, insurance, late fees, and collection costs are excluded. Figures are illustrations, not an offer, a quote, or financial advice. Review your loan agreement and Truth in Lending disclosure, and speak with a licensed lender before borrowing. For planning purposes only.