Estimate monthly payments and total interest for personal loans with APR comparison and early payoff scenarios.
This tool takes a loan amount, an APR, and a term in months, and returns the three numbers that matter: the monthly payment, total interest, and total cost repaid. It can compare two APRs side by side and show what happens when you add extra money to each payment. The result that surprises most people: total interest is far less than the APR applied to the amount borrowed. Because the balance shrinks every month, interest is charged on a declining balance. A 12-month, $10,000 loan at 10% APR costs about $550 in interest, roughly 5.5% of the principal, not $1,000.
A concrete input and expected output from the current implementation.
Input
Borrow $10,000 for 12 months at 10% APR. Compare 8% APR. What if I pay an extra $100 per month?
Expected output
At 10% APR: $879.14 per month, $549.68 total interest, $10,549.68 total repaid. At 8% APR: $869.88 per month, $438.56 total interest. Adding $100 per month at 10% APR clears the loan in the 11th month instead of the 12th and cuts total interest to about $496, saving about $54.
All figures follow from standard amortization: payment equals principal times the monthly rate (APR divided by 12) divided by 1 minus (1 + monthly rate) raised to the negative term in months. The 2-point APR gap saves only $111 because a 12-month loan repays principal quickly, and the $100 extra payment shortens the term by one month, so less interest accrues on the smaller balance.
The payment comes from the standard amortization formula: payment equals principal times the monthly rate (APR divided by 12) divided by 1 minus (1 + monthly rate) to the power of negative term in months. Each payment first covers the interest on the current balance, and the remainder reduces principal, so the interest share falls month by month as the balance shrinks.
The comparison view keeps the term fixed and recomputes payment and total interest at a second APR, so the difference shows up in dollars, not just rate points. The early-payoff view keeps the payment level, applies the extra amount to principal, and shortens the term, reporting the new payoff month and the interest saved versus the original schedule.
Because the balance shrinks every month, you pay interest only on what is still owed. On a one-year $10,000 loan at 10% APR, that is about $550, not $1,000. The opposite holds for long terms: the same APR over five years produces far more total interest because principal is repaid slowly.
Not on its own. It shows the payment, but affordability depends on your income, your other debts, and the lender's own limits, which this tool does not model. Compare the payment it produces against your budget and other obligations, and check the lender's debt-to-income guidance before applying.
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