Loan Interest Calculator
Calculate total interest paid and total cost for any fixed-rate loan.
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Enter your values and click Calculate
How It Works
The standard amortization formula determines the fixed monthly payment: M = P × r(1 + r)^n / [(1 + r)^n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (term in years × 12). This fixed payment ensures the loan is fully retired at the end of the term. Total amount repaid = M × n. Total interest = total repaid − original principal. The formula reflects the effect of compound interest: in the early months, most of M goes to interest; later, more goes to principal as the balance decreases.
Examples
$20,000 personal loan at 8% for 5 years
A typical personal loan for home improvement or debt consolidation.
Result: ~$406/month. ~$4,332 total interest.
$10,000 at 12% for 3 years
A higher-rate short-term loan.
Result: ~$332/month. ~$1,955 total interest.
$200,000 mortgage at 7% for 30 years
A typical home loan showing total interest over a long term.
Result: ~$1,331/month. ~$279,000 total interest — more than the original loan amount.
Frequently Asked Questions
How can I reduce total interest paid?
The three most effective strategies are: pay more than the minimum each month (even $50 extra reduces principal faster), choose a shorter loan term, or shop for a lower interest rate. Each strategy compounds — a shorter term at a lower rate with extra payments can cut total interest by more than half.
Does this work for mortgages?
Yes — the math is identical for any fixed-rate amortizing loan. Enter the mortgage principal, the locked annual interest rate, and the term in years. Note that this calculator shows principal and interest only — it does not include property taxes, insurance, or HOA fees that may be bundled into a monthly escrow payment.
Why is total interest sometimes more than the original loan?
On long-term, higher-rate loans, interest accumulates over many years on a slowly declining balance. A 30-year mortgage at 7% results in total interest payments that exceed the original principal. Shorter terms or lower rates dramatically reduce this effect.