Finance & Business
Repayment Calculator
Calculate your loan repayments, understand amortization schedules, and analyze total costs with our comprehensive repayment calculator.
Enter loan details to see repayment schedule and analysis
Related to Repayment Calculator
The Repayment Calculator is a comprehensive tool that helps you understand the full cost and timeline of your loan repayment. It uses standard amortization formulas to calculate your monthly payments, total interest costs, and generates a detailed repayment schedule. The calculator also considers the impact of making extra monthly payments, which can significantly reduce your loan term and total interest paid.
Monthly Payment Formula
The monthly payment is calculated using the standard loan amortization formula: PMT = P[r(1 + r)^n]/[(1 + r)^n - 1], where:
• P = Principal loan amount
• r = Monthly interest rate (annual rate ÷ 12)
• n = Total number of payments (years × 12)
• PMT = Monthly payment
Extra Payment Impact
When you make extra monthly payments, they are applied directly to the principal balance. This reduces the amount of interest you pay over time and shortens the loan term. The calculator adjusts the amortization schedule to reflect how these additional payments affect your loan payoff timeline.
The calculator provides several key metrics to help you understand your loan repayment:
Monthly Payment
This is your regular monthly payment amount, which includes both principal and interest. The payment remains constant throughout the loan term unless you make extra payments.
Total Interest
The total amount of interest you'll pay over the life of the loan. Making extra payments can significantly reduce this amount.
Time to Repay
The actual time it will take to repay the loan, which may be shorter than the original term if you make extra payments.
The interactive graph shows how your loan balance decreases over time, helping you visualize the impact of your regular payments and any extra payments you choose to make.
1. How do extra payments affect my loan?
Extra payments are applied directly to your loan's principal balance, reducing the amount of interest you pay over time and shortening the loan term. Even small additional monthly payments can lead to significant savings in total interest and help you become debt-free sooner.
2. Why does more of my payment go to interest at the start?
This is due to amortization - early in the loan term, your balance is highest, so more interest accrues. As you make payments and reduce the principal, less interest accrues, and more of each payment goes toward the principal. This is why extra payments early in the loan term have the biggest impact.
3. Should I make extra payments or invest the money?
This depends on several factors, including your loan's interest rate, potential investment returns, tax implications, and personal financial goals. Generally, if your loan's interest rate is higher than potential investment returns (after tax), making extra payments might be more beneficial. Consider consulting a financial advisor for personalized advice.
4. Can I pay off my loan early without penalties?
This depends on your loan agreement. Some loans have early repayment penalties (also called prepayment penalties), while others allow early repayment without additional costs. Check your loan documentation or contact your lender to understand any restrictions on early repayment.
5. What is the scientific source for this calculator?
This calculator uses the standard loan amortization formula widely accepted in financial mathematics and banking. The formula is derived from the time value of money principles established in financial theory and is documented in financial textbooks and academic literature. The calculations follow the compound interest formulas published by financial institutions and regulatory bodies, including the Financial Conduct Authority (FCA) guidelines for consumer credit calculations. The amortization schedule and extra payment calculations are based on the mathematical principles of compound interest and loan amortization as described in "The Mathematics of Finance" (Institute and Faculty of Actuaries) and similar academic sources.