Loan Calculator
Calculate monthly payment and total interest for equal principal and interest repayment.
Monthly payment
899,127
Total interest
2,368,569
Total repayment
32,368,569
Loan calculator
Estimates monthly payment and total interest.
Enter principal, term in months, and annual rate. Uses an equal payment (annuity) schedule: same payment each month, with interest and principal portions changing over time.
- Equal payments: each month you pay the same amount; early on more is interest, later more is principal.E.g. 30,000,000, 36 months, 5% → monthly payment and total interest are shown.
- Amortization (equal payments)
- Amortization with equal payments means the same total payment each period. The interest portion decreases and the principal portion increases over the loan term.
- Annual percentage rate (APR)
- The interest rate on a loan is often quoted as an annual rate. Fixed and variable rates exist; fees and prepayment penalties also affect the true cost.
How an equal-payment loan actually works
You pay the same amount every month, but the split between interest and principal shifts constantly. That is why the balance seems to barely move at first.
The monthly payment formula
An equal-payment (annuity) loan is designed so every monthly payment is identical.
Payment = principal × r × (1+r)^n ÷ ((1+r)^n − 1)
Here r is the monthly rate (annual ÷ 12) and n is the number of months. Borrowing 30,000 over 60 months at 5% gives a payment of 566.14, a total repaid of 33,968.22, and total interest of 3,968.22.
The same payment, a changing split
In that example the first payment is 125.00 interest and 441.14 principal, because interest is charged on the full outstanding balance.
By the final month interest is barely 2.35 and almost the whole payment reduces the balance. The 566.14 never changes, but the proportion going to principal climbs every month. That is why early payments feel like they achieve so little.
Equal payment versus equal principal
An equal-principal loan repays the same slice of principal each month and adds interest on the balance. Payments start high and fall over time.
Total interest is lower with equal principal because the balance shrinks faster. The trade-off is a heavier early burden, so choose equal payment if near-term cash flow is tight and equal principal if minimising total interest is the priority.
Interest-only periods
During an interest-only period you pay interest but nothing comes off the balance. Monthly cost drops and total cost rises.
On 30,000 at 5%, a twelve-month interest-only period costs 125 a month — 1,500 in total — with the balance unchanged at the end. When repayment begins, the same principal must be cleared over a shorter remaining term, so the payment jumps.
Early repayment charges
Many loans charge a fee for repaying early, often a percentage of the outstanding balance that tapers over the first few years.
Before overpaying, weigh the interest saved against the charge. Late in the term most of the interest has already been paid, so early repayment saves less than people expect.
| Item | Amount |
|---|---|
| Monthly payment | 566.14 |
| Total repaid | 33,968.22 |
| Total interest | 3,968.22 |
| First payment: interest / principal | 125.00 / 441.14 |
| Final payment: interest / principal | 2.35 / 563.79 |
Frequently asked questions
- Why does my balance barely drop at first?
- Interest is charged on the outstanding balance, which is largest at the start. On 30,000 at 5%, the first payment is 125 interest and 441 principal. The split shifts toward principal every month.
- Equal payment or equal principal?
- Equal principal costs less in total interest but demands more early on. Equal payment is easier on near-term cash flow.
- Is an interest-only period worth taking?
- It lowers monthly cost but the balance does not fall, so total interest rises and payments jump sharply once repayment starts.
- How much does a 1 percentage point rate rise cost?
- On 30,000 over 60 months, going from 5% to 6% adds about 13.85 a month and roughly 830 in total interest. Larger and longer loans amplify this.
- Is repaying early always worthwhile?
- Not always. Compare the early repayment charge against the interest saved. Late in the term most interest is already paid, so the saving shrinks.