Before you sign a loan, know two numbers: the monthly payment — and what the loan really costs over its full term. This calculator uses the standard amortization formula banks use. The underrated detail is the term: a longer term lowers the monthly payment but raises total interest substantially, because you rent the money for longer. Play with rate and term and watch the two numbers move in opposite directions. When comparing offers, always use the APR (annual percentage rate), which includes fees — two loans with the same nominal rate can differ widely in true cost. A healthy rule of thumb: all loan payments together should stay under 30–40 % of your net household income.
Finance
Loan Calculator: Monthly Payment and True Total Cost
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How is the monthly payment calculated?
With the amortization (annuity) formula from loan amount, interest rate and term. The payment stays constant; early payments are mostly interest, later ones mostly principal.
What is the difference between interest rate and APR?
APR includes fees and charges on top of the nominal rate, making it the right number for comparing offers.
Is a shorter or longer term better?
A shorter term means higher payments but much less total interest. Choose the shortest term you can afford comfortably with a buffer.
Do extra repayments help?
Almost always: every extra repayment reduces the balance immediately and saves all future interest on it. Check that your contract allows free extra repayments.