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Loan Calculator

See what happens when you pay a little extra every month — how much interest you save and how much sooner you become debt-free. Press Calculate.

Written and reviewed by SM Arijul Islam · Last reviewed 21 October 2026 · Editorial standards · Report an error

Why extra payments matter

Every extra pound, dollar or euro goes straight to the principal, so the interest charged next month is smaller — and that saving compounds for the rest of the term. Even modest extra payments can remove years from a mortgage.

What this calculator reports

Base monthly payment on the original schedule
New payoff time with the extra payment applied
Months and years saved, and interest saved
The effective cost of the loan including any upfront fee

Some lenders charge early-repayment penalties or limit overpayments. Check your agreement first. Results are estimates, not financial advice.

Worked example

A 20,000 loan at 6% a year over 5 years has a monthly payment of about 386.66. Over the full term you repay roughly 23,200, of which about 3,200 is interest. Paying an extra 100 a month cuts both the interest and the term noticeably.

Payment = P × r ÷ (1 − (1 + r)⁻ⁿ), where P is the principal, r the monthly rate and n the number of payments.

Everyday uses

Comparing mortgage and car-loan offers
Seeing how much extra payments save
Checking whether a repayment fits your budget
Understanding why early payments are mostly interest
Testing a shorter term against a longer one

What the calculator does not include

These results are the pure mathematics of a level-payment loan: principal, rate and term. Real borrowing adds several things that change the cost without changing the formula.

Arrangement and valuation fees. Usually deducted at completion or added to the balance, which raises the effective rate above the one you typed in.
Early-repayment charges. Many fixed-rate loans cap how much you can overpay each year; exceeding the cap can cost more than the interest saved.
Variable rates. A rate that tracks a benchmark will not stay at today's level for the whole term. Running the calculation two or three percentage points higher is a useful stress test.
Insurance and taxes. Mortgage payments in some countries include property tax and buildings insurance in escrow, so the amount leaving your account is higher than the loan payment itself.
Payment timing. The formula assumes payments at the end of each period; payments at the beginning reduce the total slightly.

None of this makes the calculator wrong — it makes it the starting point. Compare offers on APR, which folds most fees in, and read the early-repayment terms before committing to an overpayment strategy.

Frequently asked questions

How is the monthly payment calculated?

It is a standard amortisation formula that spreads principal and interest into equal instalments over the term.

Why do extra payments help so much?

Every extra amount goes straight to the principal, so less interest accrues in every later month — the saving compounds.

Why is so much of the early payment interest?

Interest is charged on the outstanding balance, which is largest at the start of the loan.

What is not included in the result?

Arrangement fees, insurance, taxes and any rate changes — add them separately for the full cost.

More worked examples

20,000 at 6% over 5 years costs 386.66 a month, with roughly 3,200 of interest across the term.
On a 25-year, 200,000 mortgage at 5%, the monthly payment is about 1,169.
In that mortgage's first month, 833 of the payment is interest and only about 336 reduces the balance.
Adding 200 a month to the 20,000 loan clears it in about 37 months instead of 60, saving roughly 1,200 in interest.

Common mistakes to avoid

Comparing monthly payments while ignoring total cost; a longer term always lowers the payment and raises the interest.
Overlooking arrangement fees, which are often added to the principal and quietly increase the interest.
Treating a quoted rate as fixed when the offer may be variable or a short-term introductory rate.
Making overpayments without checking for early-repayment charges.

Further questions

What does amortisation mean?

It is the process of repaying a loan through equal payments that cover both interest and principal over a fixed term.

What is the difference between the interest rate and the APR?

The APR includes fees and charges, so it is usually higher and is the better figure for comparing offers.

Does paying fortnightly instead of monthly help?

Only because it means 26 half-payments, which is 13 full payments a year rather than 12 — the extra payment is what saves.

What happens if I miss a payment?

Usually a late fee plus extra interest, and on most loans it is reported to credit reference agencies.

Assumptions and sources

The schedule uses the standard level-payment amortisation formula. It assumes a fixed interest rate, regular payments and no fees, insurance, taxes or early-repayment charges unless you enter them. Extra payments are applied to the balance in the month you specify.

How is EMI calculated

EMI is a fixed monthly payment that clears both interest and principal over the term: EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where P is the principal, r the monthly interest rate (annual rate ÷ 12 ÷ 100) and n the number of months. The formula front-loads interest, which is why the balance falls slowly at first.

20 lakh home loan EMI

A 20 lakh home loan EMI at 8.5% over 20 years is about ₹17,356 a month: P = 2,000,000, r = 0.0070833 and n = 240. Over the full term that is ₹4,165,000 repaid, of which ₹2,165,000 is interest — more than the amount borrowed.

EMI for a 20 lakh loan at different rates and terms
Rate	15 years	20 years	25 years
7.5%	₹18,542	₹16,107	₹14,796
8.5%	₹19,693	₹17,356	₹16,117
9.5%	₹20,885	₹18,644	₹17,478

Add one extra payment a year and a 20-year loan typically finishes three to four years early; the extra-payment mode above shows the exact saving for your own numbers.