Introduction
When you borrow money, you pay back more than you borrowed. The extra amount is called interest, and the interest rate on your loan decides how much extra you owe. Even a small change in your rate can cost you hundreds or thousands of dollars over time.2 That is why it helps to know your numbers before you sign a loan agreement.
This loan interest rate calculator shows you exactly what your loan will cost. Enter your loan amount, interest rate, and loan term, and the tool gives you your payment amount, total interest paid, and total cost of the loan. It builds a full amortization schedule so you can see how each payment splits between principal and interest. You can also add extra payments to see how much time and money you save, compare up to three loan scenarios side by side, and factor in fees to find your effective APR.
This calculator helps you make a smart choice on a car loan, personal loan, or any other fixed-rate loan. For a variable-rate loan, it shows the schedule as if today's rate held for the whole term. Use it to compare lenders, test different down payments, or find the loan term that fits your budget.
How to Use Our Loan Interest Rate Calculator
Enter your loan details below to find out your payment amount, total interest, total cost, and full payoff schedule.
Loan Amount: Type the price or total amount before any down payment. The calculator subtracts your down payment to find the amount you borrow. You can also drag the slider to pick a number.
Down Payment: Enter any money you will pay upfront. You can switch between a dollar amount or a percentage of the loan by clicking the toggle.
Annual Interest Rate: Enter the yearly interest rate your lender is charging, not the APR. Enter fees in their own box below, and the calculator works them into your effective APR. Use the slider or type the exact rate.
Loan Term: Enter how long you have to pay back the loan. Click "Years" or "Months" to pick the unit you want to use.
Payment Frequency: Choose how often you make payments. Options are monthly, bi-weekly, or weekly.
Compounding: Select how often your interest compounds. Choose monthly, daily, or continuously.
Variable-Rate Loans: The schedule assumes the rate you enter for the whole term. If your rate changes, enter your remaining balance as the loan amount, the new rate, and the time left on the loan to see the new schedule.
Start Date: Select the month and year your loan begins.
Origination / Closing Fees: Enter any upfront fees charged by your lender. These are added to your total cost and affect your effective APR.
Extra Payment / Period: Enter any extra money you want to pay each period on top of your regular payment. This helps you pay off the loan faster and save on interest.
Balloon Payment: Enter a lump sum amount due at the end of your loan term. Leave this at zero if your loan does not have one.
Grace Period: Enter any extra days before your first payment is due. Every payment date moves later by that many days. The calculator does not add interest for those days.
Click Calculate to see your results, charts, and full amortization schedule. Click Add Current as Scenario to save up to three setups and compare them side by side.
What Is a Loan Interest Rate?
When you borrow money, the lender charges you a fee for using their funds. That fee is called interest, and it is shown as a percentage known as the interest rate. For example, 5% a year on $10,000 is $500 of interest for each year the full $10,000 is owed. As you pay the loan down, the yearly interest gets smaller. The interest rate is one of the biggest factors that decides how much a loan truly costs you.
How Loan Interest Works
Fixed-rate car loans, installment personal loans and mortgages are repaid with a method called amortization.3 Each payment you make is split into two parts: one part pays down the amount you borrowed (the principal), and the other part covers the interest.3 Early in the loan, more of each payment goes toward interest, and over time more of it goes toward the principal.3 This is most noticeable on long loans such as mortgages.3 That is why paying extra early on can save you a lot of money in the long run.
Fixed Rate vs. Variable Rate
A fixed-rate loan keeps the same interest rate for the entire term.2 Your payment stays the same every month, which makes budgeting easy. A variable-rate loan has a rate that can go up or down based on market conditions.2 It may start lower than a fixed rate, but it carries more risk because your payment can increase over time.2
APR vs. Interest Rate
The annual percentage rate (APR) is not the same as the basic interest rate. The APR includes the interest rate plus any extra fees or costs the lender charges, like origination fees or closing costs.1 This makes the APR a better way to see the true cost of a loan. A loan with a low interest rate but high fees can end up with a higher APR than a loan with a slightly higher rate and no fees.
What Affects Your Interest Rate?
Several things determine the rate a lender offers you:
- Credit score: A higher score usually means a lower rate.1
- Loan term: Shorter loans mean higher monthly payments but less total interest.2
- Down payment: Putting more money down reduces the lender's risk, which can lower your rate.2
- Loan type: Mortgages, auto loans, and personal loans each carry different typical rates.
- Market conditions: Rates rise and fall based on the broader economy and central bank decisions.
How Extra Payments Help
Making extra payments toward your principal shrinks your balance faster. Since interest is calculated on the remaining balance, a smaller balance means less interest each period.3 Even small extra payments made consistently can cut months or years off your loan and save you thousands of dollars in total interest.