Using the Interest Rate Calculator
Use only payments that repay the loan and interest. Bundled insurance or service plans would make the inferred rate look higher because this model would treat their cost as borrowing interest.
Worked example
Use the example inputs below to reproduce this result. These are the form's starting values, not recommended targets. Changing your inputs updates your result above; this worked example stays fixed for comparison. Results are rounded for display.
Example inputs
- Amount borrowed
- 10000
- Monthly payment
- 200
- Number of payments
- 60
Example result
- Nominal annual rate (%)
- 7.42
Method and assumptions
Numerically solves the ordinary annuity payment formula. Assumes no fees.
Compare the whole borrowing commitment
When comparing loan scenarios, change one assumption at a time. First compare terms at the same rate and balance, then compare rates over the same term. This makes it easier to see why the monthly payment changes. Keep any upfront costs alongside the result so that a lower installment does not hide a more expensive agreement.
Common question
Can the calculator find a negative interest rate?
This tool searches for a nonnegative rate. If all scheduled payments add up to less than the borrowed principal, the scenario falls outside that model.
Guide updated .