Loan Repayment Calculator

What this calculator is, and when to reach for it

This is the general-purpose loan calculator: give it a balance, a rate, and a time to repay, and it works out the scheduled payment, when the debt clears, what it costs in total, and what happens if you pay more than required. It makes no assumption about what the money was for, which is precisely what makes it useful when the specialised calculators do not fit.

The one thing it insists on is direction. It works out the payment from your balance, rate, and term rather than letting you name a payment and seeing what happens. That is deliberate: a scheduled payment is a contractual figure derived from the loan, and calculators that let you invent one tend to produce plans that no lender has agreed to.

Where it earns its place is the extra payment field. Because the schedule is built period by period, you can see exactly what an additional amount does to the payoff date and to total interest — which is the question most people actually have once a loan is running.

Reach for it when you have a loan that does not match a named product, when you want a schedule for something you are modelling, or when you want to test what a regular overpayment would achieve on any fixed-rate balance.

What "time to repay" really controls

The term is the single most powerful input on the page, and the least understood. It does not change what you owe, and it does not change the rate. It changes how many periods the balance is spread across, and therefore how long interest has to accumulate.

Short terms produce uncomfortable payments and low total costs. Long terms produce comfortable payments and high total costs. There is no configuration in which a longer term is cheaper, which is worth stating plainly because the monthly figure so often suggests otherwise.

The useful discipline is to run the shortest term you could service, then the longest you would consider, and look at the gap in total interest. That gap is what the comfort of the lower payment costs.

Where to go next

For specific products with their own quirks, the personal loan calculator handles origination fees deducted from the advance, the auto loan calculator handles tax and trade-ins, and the student loan calculator covers the standard repayment baseline.

To weigh two loans against each other rather than model one, use the loan comparison calculator. To convert an offer with fees into a single comparable figure, the APR calculator does that for any fixed-rate instalment loan.

On a mortgage the same arithmetic appears in the mortgage calculator and the amortization calculator, with escrow and payment frequency added. If the balance is on a card rather than a loan, the credit card payoff calculator is the right tool, since card minimums behave quite differently.

How the schedule is built

The scheduled payment comes from the amortization formula. The schedule itself is then built one period at a time, which is what allows extra payments to be modelled properly.

M = P × [ r(1 + r)ⁿ ] ÷ [ (1 + r)ⁿ − 1 ]   then   B_next = B − ((M + E) − B × r)

P

the balance you are repaying

r

the periodic rate, being the annual rate divided by periods per year

n

the number of periods in the repayment term

E

any extra amount you add on top of the scheduled payment

Why the payment is derived rather than chosen

A scheduled payment is not a preference. It is the exact amount that brings the balance to zero on the final period at the given rate, and it is fixed by the loan agreement. Deriving it from the balance, rate, and term is how a lender arrives at it, and reproducing that faithfully is what makes the output comparable to a real agreement.

The extra payment field is where flexibility belongs. It sits on top of the contractual figure rather than replacing it, which mirrors how overpayment actually works: you owe the scheduled amount and may choose to pay more.

How an extra amount shortens the loan

Each period, interest is charged on the balance and everything else in the payment reduces it. An extra amount goes entirely to the balance, so the following period’s interest is charged on a smaller figure, and slightly more of the next scheduled payment reaches principal too.

The saving therefore compounds. Every unit of extra principal avoids not just its own interest but all the interest it would have generated for the rest of the term, which is why even modest overpayments remove disproportionate amounts of both time and cost.

The ending balance, and what it tells you

A properly derived schedule ends at exactly zero, and the final payment often differs by a small amount from the others because it absorbs the accumulated rounding. Seeing a non-zero ending balance is a signal that an input does not describe a loan that actually amortizes.

The most common cause is a payment that does not cover the interest, which happens when a term is unrealistically long for the rate. In that case the balance would grow rather than fall, and no schedule exists.

What this page assumes about your loan

A fixed rate held for the whole term, interest charged on the outstanding balance each period, equal scheduled payments, and no fees. Most instalment lending works this way, which is why one calculator covers so many products.

Where a loan differs — a variable rate, interest calculated daily rather than monthly, an arrangement fee deducted from the advance, or a penalty for early repayment — the schedule here will be close but not exact, and the specialised calculators handle those cases directly.

What this page assumes

The calculator works out a level monthly payment, then shows a month-by-month schedule of interest, the amount coming off the balance, the payment, and what is left.

Each month, interest equals prior balance times monthly rate. Principal equals the lesser of scheduled payment plus extra payment less interest, or the remaining balance.

Worked examples, step by step

Take a 20,000 balance at 9.5% to be repaid over 60 months, and compare paying the scheduled amount against adding 100 a month.

Scheduled payments against a regular overpayment

The scheduled payment is 420.04 and the loan costs 5,202.23 in interest across five years. Adding 100 a month clears it in 47 payments instead of 60 — thirteen months early — and saves 1,257.89.

Look at what that costs. Across the shortened loan the borrower contributes roughly 4,700 of extra payments and avoids 1,257.89 of interest, while finishing more than a year sooner. On a relatively short loan at a moderate rate, the return is real but nothing like the effect the same discipline has on a thirty-year mortgage or a credit card.

Why the return here is smaller than on longer debt

Overpayment saves interest in proportion to how long that interest would otherwise have accrued. A five-year loan simply does not have much future left to remove, so the avoided interest is modest compared with the cash committed.

The practical conclusion is about ordering rather than merit. If you have spare capacity and both a five-year loan at 9.5% and a card balance at 22.9%, the card is the better target by a wide margin — not because overpaying this loan is wrong, but because the same money removes far more cost elsewhere.

The vocabulary, on and around this page

Scheduled payment

The contractual amount due each period, derived from the balance, rate, and term so the loan clears exactly on the final payment.

Time to repay

The number of periods over which the loan is scheduled to clear. It is the most powerful input on the page and never makes a loan cheaper when extended.

Extra payment

An amount added on top of the scheduled figure. It applies entirely to the balance and shortens the loan from the end.

Payoff period

How many payments are actually made once any overpayment is taken into account, which can be well short of the contractual term.

Ending balance

What remains after the final scheduled payment. On a correctly derived schedule it is zero, and anything else signals an input problem.

Periodic rate

The rate applied in a single period, found by dividing the annual rate by the number of payments in a year.

Amortization

The process by which each payment covers interest first and reduces the balance with the remainder, shifting toward principal over time.

Total interest

Every interest charge across the life of the loan added together. The figure overpayment is designed to reduce.

Total paid

The balance plus all interest. Comparing it against the amount borrowed is the plainest view of what a loan costs.

Instalment loan

Borrowing repaid in equal amounts over a defined term with a known end date, as distinct from revolving credit.

Fixed rate

A rate that does not change, which is what makes a full schedule projectable from the first payment.

Rounding adjustment

The small difference in the final payment that brings the balance exactly to zero after accumulated rounding.

Principal

The balance owed, on which interest is charged each period. Reducing it early is what makes overpayment effective.

Interest portion

The part of a payment consumed by the period’s interest charge before anything reaches the balance.

Negative amortization

What happens when a payment does not cover the interest, so the balance grows. No valid schedule exists in that case.

Prepayment penalty

A charge for repaying early or above a limit. Not modelled here, and it can offset the benefit of overpaying.

Balloon payment

A large amount due at the end of some loans that are not scheduled to reach zero through regular payments alone.

Opportunity cost

What money used for overpayment could have achieved elsewhere, such as clearing higher-rate debt first.

Effective saving

Interest avoided by overpaying, measured against the extra cash contributed to achieve it.

Payment frequency

How often payments are made. Changing it alters both the periodic rate and the number of periods together.

Common mistakes, and what this page will not do

• Choosing the term by working back from a payment. That produces the longest loan you can bear rather than the cheapest you can manage. Decide the term first, then check the payment.
• Assuming a longer term can ever be cheaper. It never is. A longer term lowers the payment and raises total interest, without exception.
• Entering the original loan rather than the current balance. A schedule starts from what you owe now. Using the amount originally borrowed overstates both the payment and the interest.
• Overpaying this loan before higher-rate debt. A five-year loan at 9.5% has little future interest to remove. The same money against a card at 22.9% removes far more cost.
• Not designating an extra as principal. Many lenders apply an unexplained excess to the next instalment instead of the balance, and the schedule never shortens.
• Modelling overpayments a lender may not permit. Some agreements restrict or charge for early repayment, so confirm the terms before planning a schedule around extra amounts.
• Mixing annual and periodic figures. The rate is annual and the term is in periods. Entering a monthly rate or a term in years produces a schedule for a very different loan.
• Expecting a payment that does not cover interest to work. If the payment is below the period’s interest the balance grows and no schedule exists. It is a sign the term is unrealistic for the rate.
• Using this for a card balance. Card minimums are recalculated from a falling balance rather than fixed, which behaves completely differently.

What this calculator leaves out: This calculator assumes a fixed rate, equal scheduled payments, and interest charged on the outstanding balance each period. It does not model fees, origination charges deducted from the advance, prepayment penalties, variable rates, daily interest accrual, or tax treatment. Enter the balance as it stands today.

Frequently asked questions