Loan Interest Calculator

Understand the true cost of borrowing with our free loan interest calculator. By entering the loan amount, interest rate, and term, you can instantly see the total interest you'll pay and the total amount to be repaid. An essential tool for comparing loan offers and managing your debt. Explore more financial tools on CalculatorBolt.

Loan Details

Principal amount borrowed
Yearly rate as percentage
Duration of loan
How often interest compounds

Preset Scenarios

Extra Monthly Payment

Additional amount applied to principal each month

Export

How to Calculate Loan Interest

This calculator uses the compound interest formula to determine the total cost of a loan. The key variables are the principal (loan amount), the annual interest rate (APR), the loan term, and the compounding frequency. The more frequently interest is compounded, the more interest you will pay.

Inputs Explained

  • Loan Amount: The principal amount of money you borrow.
  • Annual Interest Rate (APR): The yearly cost of the loan, including fees, expressed as a percentage.
  • Loan Term: The duration of the loan. The longer the term, the more interest you will accrue.
  • Compounding Frequency: How often the calculated interest is added to the principal balance.

Example

For a $10,000 loan at a 6.5% APR over 5 years, compounded monthly:

  • Total Interest Paid: $3,789.66
  • Total Amount to Repay: $13,789.66

Tips for Managing Loans

  • Compare APRs: Even a small difference in APR can save you a significant amount over the life of a loan.
  • Make Extra Payments: Paying a little extra each month can dramatically reduce your total interest and shorten your loan term.
  • Understand Compounding: Be aware that loans with more frequent compounding (e.g., daily) will accrue more interest than those compounded annually at the same rate.
  • Check for Fees: Some loans have origination fees that are included in the APR, while others have hidden costs.

FAQs

APR (Annual Percentage Rate) is a standardized measure that includes the interest rate plus certain loan-related fees, providing a more complete picture of the loan's yearly cost.

More frequent compounding results in more interest being accrued. A loan with daily compounding will cost more than one with annual compounding at the same nominal rate.

It's a table detailing each periodic loan payment, showing how much of each payment goes toward interest and how much goes toward reducing the principal balance.

No. This calculator focuses on principal and interest. Property taxes or insurance for a mortgage are not included.

Disclaimer

This loan interest calculator provides an estimate based on the data you enter. It is for informational and comparison purposes only and does not constitute a loan offer or financial advice. Actual loan terms, including fees and rates, are determined by lenders and can vary based on your creditworthiness. Consult with a qualified financial advisor before making any borrowing decisions.

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Author: CalculatorBolt Editorial Team
Reviewed by: Financial Advisor
Published: • Updated: