Formula & assumptions
The loan is assumed to be fully repaid by equal month-end payments with monthly interest and a fixed nominal annual rate. The monthly payment covers both interest and principal. At zero interest it becomes principal divided by the number of months. This is not a mortgage quote: fees, insurance, property taxes, irregular first periods and lender-specific rounding are outside the model.
Worked example
A 12,000 loan at 0% for 24 months requires 500 per month and no interest. A positive interest rate increases both the installment and the total repayment.
How to use this calculator
- Enter the amount borrowed, excluding fees financed separately.
- Enter the fixed nominal annual interest rate and the number of monthly payments.
- Compare the installment with total interest and repayment before assessing affordability.
Frequently asked questions
Can I enter APR instead of the interest rate?
APR can include fees and is not necessarily the nominal rate used to calculate installments. Use the contractual interest rate for this model.
Does a longer term always cost less?
It usually lowers the monthly payment but can increase total interest at the same rate. Compare both results.
Can I model extra payments or variable rates?
No. This version assumes scheduled equal payments and a constant rate.