Loan Interest Calculator

Loan Interest Calculator – Know the True Cost of Borrowing

Understanding how much interest you'll pay on a loan is just as important as knowing your monthly payment. This calculator computes total interest for both simple and compound interest loans, helping you compare different loan offers and terms.

Simple vs. Compound Interest

Simple Interest: I = P × r × t — Interest is calculated only on the original principal. Common in some personal loans and auto financing.

Compound Interest: Used in standard amortizing loans (mortgages, most personal loans). Each payment covers accrued interest first, then principal. The standard monthly payment formula applies.

How to Reduce Loan Interest

• Negotiate a lower rate by improving your credit score before applying.
• Choose a shorter term — you pay more per month but significantly less total interest.
• Make extra payments — any extra principal payment reduces future interest charges.
• Refinance — if rates drop or your credit improves, refinancing can cut total interest.