KKoumen Tools PRO

What will this loan really cost?

Monthly payment, total interest and the full payoff figure. No signup, nothing stored.

$
%
yr
Monthly payment
$1,896
Total paid$682,560
Interest$382,560
Payments360

Working out a loan payment

A loan payment has three inputs and one output, but the output hides a second number that matters more: the total interest you will hand over across the life of the loan.

  1. Enter the amount borrowed. The principal — what you actually receive, not the price of the thing you are buying. If you are financing a $30,000 car with $5,000 down, the loan amount is $25,000.
  2. Enter the annual interest rate. The nominal rate quoted in the agreement, before fees. If the lender quotes an APR, that figure includes fees and will be slightly higher than the rate used for the payment calculation.
  3. Pick the term. Usually in months for a car loan and years for a personal loan. Longer terms lower the monthly payment and raise the total interest — the tool shows both so the trade-off is visible rather than implied.
  4. Read the payment and the total interest. The monthly figure is principal plus interest, blended. Early payments are mostly interest; the split only flips in the second half of the term.

When this comes up

Questions

What is the difference between interest rate and APR?

The interest rate determines the payment. The APR adds origination fees, closing costs and any mandatory charges, then expresses the whole thing as one annual rate. APR is the better number for comparing offers, because a loan with a low rate and a large fee can be worse than one with a slightly higher rate and no fee.

Why is total interest so much higher than rate × years?

Because the balance does not stay at the original amount. It declines every month, so interest is charged on a shrinking number — which is why a 6% loan over 5 years costs roughly 16% of the principal in interest, not 30%. The calculation is an amortisation schedule, and this tool runs the same one a lender does.

Should I take the longest term available to keep the payment low?

Only if the lower payment is genuinely needed. A 72-month car loan usually costs 30–40% more in total interest than the same loan over 48 months, and you will owe more than the car is worth for most of the term. If you need the long term to afford the car, the car is probably too expensive.

What happens if I pay extra?

Every extra dollar goes straight to principal, which removes all the future interest that dollar would have generated. The mortgage calculator on this site has an extra-payment field if you want to see the effect on a long loan; on short loans the same logic applies, just with less to save.

All-Access — every tool, one payment

The calculator is free and stays free. All-Access removes the upgrade prompt and unlocks every tool on this site.