Yearly breakdown of payments
| Year | Principal paid | Interest paid | Balance left |
|---|---|---|---|
| 1 | 4,281.58 | 1,729.81 | 20,718.42 |
| 2 | 4,613.97 | 1,397.42 | 16,104.46 |
| 3 | 4,972.16 | 1,039.22 | 11,132.29 |
| 4 | 5,358.16 | 653.22 | 5,774.13 |
| 5 | 5,774.13 | 237.25 | 0.00 |
Loan Calculator
Your monthly payment, total interest and a year-by-year breakdown for any fixed-rate loan.
How it works
Most personal loans, car loans and mortgages are repaid in equal monthly payments. Each payment first covers the interest owed that month, and the rest reduces the amount you still owe.
Early on, the balance is large, so more of each payment goes to interest. As the balance shrinks, more goes to paying off the loan itself. The yearly table shows this shift.
The yearly rate is divided by 12 to get a monthly rate, and interest is added once a month. This is the standard method used for EMI calculations by most lenders.
r = yearly rate ÷ 12 ÷ 100 n = number of monthly payments Monthly payment = P × r × (1 + r)^n ÷ ((1 + r)^n − 1) P is the amount borrowed. If the rate is 0, the payment is P ÷ n.
Worked example: a car loan
You borrow 25,000 at 7.5% a year for 5 years. The monthly rate is 7.5 ÷ 12 = 0.625%, and there are 60 payments.
Putting those into the formula gives a monthly payment of about 500.95. Over 60 months you pay about 30,057 in total, so the interest cost is about 5,057.
Good to know
- Fees, insurance and taxes that a lender adds are not included. Ask your lender for the annual percentage rate (APR), which includes most fees, and use that as the rate for a closer estimate.
- Some loans compound interest differently. Canadian fixed-rate mortgages, for example, compound twice a year, which gives a slightly lower payment than this calculator shows.
- Variable-rate loans change over time. The result here assumes the rate stays the same for the whole loan.
- Islamic financing (such as murabaha or diminishing musharaka) uses profit rather than interest, but the monthly payment is often calculated in a similar way. Confirm the exact method with your provider.
Questions people ask
What is EMI?
EMI stands for equated monthly instalment. It is the fixed amount you pay every month until the loan is cleared, and it is exactly what this calculator shows as the monthly payment.
How can I pay less interest overall?
A shorter loan length or a lower rate reduces total interest. Extra payments toward the principal also help, because interest is charged on a smaller balance from then on. Try a shorter length above to see the difference.
Does this work for mortgages?
Yes, for fixed-rate mortgages with monthly payments. Enter the amount you borrow after your down payment, not the price of the home.
Which currency does it use?
Any. The maths is the same in every currency, so enter your amount as you would write it and read the result in the same currency.