What this loan calculator does
Enter a purchase price, a down payment, an interest rate and a term, and this tool calculates the monthly payment, the total interest you will pay, the total cost of the loan and a full year-by-year amortization schedule. You can choose between an annuity loan, a balloon loan (with a final payment) and an interest-only loan, add an extra repayment, and see how each affects the payment and interest. Everything is calculated locally in your browser.
How an annuity loan works
Most consumer and home loans are annuity loans: you pay the same amount every month for the whole term. That fixed payment is split into two parts — interest on the remaining debt, and repayment of the principal. At the start the balance is high, so most of the payment is interest. As the balance shrinks, the interest portion falls and the repayment portion grows. By the final month the loan reaches zero.
The amortization schedule makes this visible: each row shows how much of that year went to interest versus paying down the actual debt, and what is still owed at year-end.
Down payment, balloon and interest-only loans
The down payment is subtracted from the purchase price — only the rest is financed. The larger the down payment, the smaller the financed amount, the monthly payment and the total interest.
The loan type covers three common models:
- Annuity loan — a constant payment, fully repaid by the end of the term.
- Balloon loan — common in car financing. A large final payment (the balloon or residual value) is only due at the end. This keeps the monthly payment low, but you pay more interest overall because the principal is repaid more slowly. You enter the final payment; the calculator works out the matching monthly rate.
- Interest-only loan — the extreme case: you pay only interest each month and the entire loan amount falls due in one go at the end of the term.
The effect of extra repayments
A yearly extra repayment (often called a special repayment) is money you put toward the principal on top of your regular instalments. Because it reduces the balance directly, every future interest charge is calculated on a smaller debt. The result is twofold:
- The loan is paid off sooner than the original term.
- You pay less total interest, often surprisingly much over a long mortgage.
Try setting an extra repayment and watch the "paid off in" figure and total interest drop. Note that real loan contracts often limit how much you may repay early each year.
What the calculator does not include
To keep the result clear, this calculator models the core loan mathematics only. Real offers usually add:
- Fees — arrangement, valuation or account fees.
- Fixed-rate periods — after which the rate (and payment) may change.
- Residual debt — if the fixed period is shorter than the full repayment term.
So treat the numbers as a solid orientation, not a binding quote.
Tips for comparing loans
- Compare the total cost, not just the monthly payment — a longer term lowers the monthly figure but raises total interest.
- A small difference in the interest rate has a large effect over many years.
- Even a modest yearly extra repayment can shorten a long loan considerably.
This tool is for information only and is not financial advice. Always confirm the exact figures with your bank or lender before making a decision.