Using the Loan Calculator
Start with the amount actually financed, rather than the price of the purchase. Then compare two terms at the same rate. A longer term can make the monthly budget easier while leaving you paying more interest overall.
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
- 20000
- Annual interest rate (%)
- 6
- Term (months)
- 60
Example result
- Monthly payment
- 386.66
- Total payments
- 23,199.36
- Total interest
- 3,199.36
Method and assumptions
Fully amortizing loan with equal end-of-month payments, monthly interest and no fees, taxes, insurance or variable-rate changes. All amounts use the same currency.
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
Why is my lender’s payment different?
A lender may include fees, insurance, a different interest convention or a first payment period longer than one month. This estimate uses equal monthly periods and excludes those extras.
Guide updated .