About the Loan Calculator
A fixed-rate loan is repaid with the same instalment every month, but the split between interest and principal changes as the balance falls. This calculator applies the standard amortisation formula so you can see the monthly instalment, the lifetime interest cost, and the total amount you will hand back to the lender before you sign anything.
How to use the Loan Calculator
- Enter the amount you actually plan to borrow after any deposit or trade-in.
- Enter the annual nominal interest rate quoted by the lender, not the APR that includes fees.
- Set the term in years — try 3, 5 and 7 years to see how much extra interest a longer term costs.
- Compare the monthly payment against your budget and the total interest against the price of the item.
The formula behind it
Monthly payment = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where P is the principal, r is the monthly rate (annual rate ÷ 1200) and n is the number of monthly payments.
Frequently asked questions
Does this loan calculator include fees and insurance?
No. It models the pure amortising loan only. Arrangement fees, payment protection insurance, taxes, and late charges are excluded, so your lender quote will usually be slightly higher.
Why does a longer loan term cost so much more?
A longer term lowers the monthly instalment but leaves the balance outstanding for more months, and interest is charged on that balance every month. Extending a 5-year loan to 7 years often adds 40% or more to the total interest.
Is EMI the same thing as a monthly payment?
Yes. EMI stands for Equated Monthly Instalment, the term used across South Asia for the fixed monthly repayment of an amortising loan. The mathematics is identical.
What happens if I enter a 0% interest rate?
The calculator falls back to a straight-line split, dividing the principal evenly across the number of months, which is exactly how an interest-free instalment plan works.