How to calculate loan payments
A monthly payment depends on the amount borrowed, the periodic interest rate and the number of payments. Comparing loans requires using the same amount and term.
Calculate a loan paymentEnter your own amount, rate and term.Loan payment formula
For an amortising loan, multiply the principal by the monthly rate and the growth factor, then divide by the growth factor minus one. Fees and insurance should be added separately.
Worked example
For a 10,000 loan at 1% monthly interest over 12 months, the estimated payment is about 888.49 per month and total repayment is about 10,661.85.
Loan payment questions
Does a longer term lower the payment?
Usually yes, but it normally increases the total interest paid.
Are bank fees included?
No. Add arrangement fees, insurance and taxes when comparing the full cost.