Loan Total Interest Calculator
Calculate the total interest you will pay over the life of a loan.
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Enter your values and click Calculate
How It Works
The monthly payment is computed using the standard amortization formula: M = P × r(1 + r)^n / [(1 + r)^n − 1], where P is the principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments (term in years × 12). Total amount paid = M × n. Total interest = total paid − original principal. The interest-to-principal ratio = total interest ÷ principal × 100, which illustrates how expensive longer terms or higher rates are relative to the amount borrowed. This calculation assumes all payments are made on schedule with no extra payments or early payoff.
Examples
$20k personal loan
$20,000 at 7% over 5 years.
Result: Monthly payment ~$396. Total interest ~$3,761.
$300k mortgage
$300,000 at 6.5% over 30 years.
Result: Monthly ~$1,896. Total interest ~$382,633 — more than the original principal.
$25,000 auto loan at 8% for 5 years
A typical car financing scenario.
Result: Monthly ~$507. Total interest ~$5,415 — about 22% of the loan amount.
Frequently Asked Questions
Why does a longer term mean more total interest?
Although monthly payments are lower on a longer-term loan, interest accrues for more months on a slowly declining balance. A 30-year loan at the same rate and amount as a 15-year loan may have payments that are 30% lower but total interest that is more than double. The extra years of compounding more than offset the lower payments.
How can I reduce total interest?
The most effective strategies are: choose the shortest term you can comfortably afford, make extra principal payments whenever possible, and shop for the lowest interest rate. Refinancing when rates drop is also powerful — a 1% rate reduction on a $300,000 mortgage saves over $50,000 in total interest.
What does interest as a percentage of principal tell me?
This ratio shows how expensive the loan is relative to the amount borrowed. A 5-year loan at 7% might have an interest ratio of 19%, meaning you pay $1.19 for every $1 borrowed. A 30-year loan at the same rate has a ratio near 100% or more — meaning you pay back double or more. It is a quick way to compare the cost efficiency of different loan structures.