Loan Calculator
Calculate your monthly loan repayments, total interest, and total repayment amount instantly. This free Loan Calculator works for personal loans, car loans, business loans, and more.
How to Use
Enter your loan amount.
Enter the annual interest rate (%).
Enter the loan term and choose Years or Months.
Click Calculate Loan.
View your monthly payment, total interest, and total repayment amount.
Example Calculation
This example shows how the Loan Calculator works using sample figures. Enter your own loan amount, interest rate, and repayment term to receive a personalised estimate.
Example Loan Calculation
Suppose you borrow £10,000 with an annual interest rate of 6.5% over 5 years.
The calculator estimates:
Loan Amount: £10,000
Interest Rate: 6.5% per year
Loan Term: 5 years (60 monthly payments)
Estimated Results
Monthly Payment: £195.66
Total Interest Paid: £1,739.69
Total Repayment: £11,739.69
Although you borrowed £10,000, you repay £11,739.69 over five years.
The extra £1,739.69 is the total interest charged by the lender.
Your monthly payment is £195.66, making it easier to budget your repayments over the life of the loan.
These figures are estimates and may vary depending on lender fees, compounding methods, repayment schedules, or changes to the interest rate.
Loan Formula
How is the monthly loan payment calculated?
Our Loan Calculator uses the standard amortization formula, which is the method used by banks, lenders, and financial institutions to calculate fixed monthly loan payments.
Formula
M = P × [r(1 + r)^n] ÷ [(1 + r)^n − 1]
What each symbol means
Symbol Meaning
M Monthly payment
P Loan amount (principal)
r Monthly interest rate (Annual Rate ÷ 12 ÷ 100)
n Total number of monthly payments
Example
For a loan of £10,000 at 6.5% annual interest over 5 years:
Loan Amount (P): £10,000
Annual Interest Rate: 6.5%
Monthly Interest Rate (r): 0.065 ÷ 12 = 0.005417
Number of Payments (n): 60 months
Using the formula, the estimated monthly payment is:
£195.66 per month
Why this formula is used
The amortization formula ensures that every monthly payment covers:
A portion of the loan principal.
The interest charged for that month.
At the beginning of the loan, a larger part of each payment goes toward interest. As the balance decreases over time, more of each payment goes toward repaying the principal.
This results in a fixed monthly payment throughout the loan term (assuming the interest rate remains unchanged).
Frequently Asked Questions
Is this Loan Calculator free to use?
Yes. The ToolNestPro Loan Calculator is completely free and can be used as many times as you like.
Does this calculator work for all countries?
Does this calculator include bank fees?
No. The calculator estimates repayments based on the loan amount, interest rate, and repayment period only. Bank fees, insurance, taxes, and other charges are not included.
Yes. This calculator works worldwide. Simply select your preferred currency, enter your loan details, and the calculator will estimate your monthly repayment.