How to use this calculator
The model assumes equal payments at the end of each month and a fixed interest rate. Each payment covers interest and pays down part of the principal.
Fees, insurance, late charges and early repayment adjustments are excluded. An APR that includes fees is not necessarily the nominal interest rate required by this formula.
The formula
Payment = P × r ÷ [1 − (1 + r)^−n]. P is principal, r is annual rate ÷ 1200 and n is months. At 0%: payment = P ÷ n.
A worked example
A 10,000 loan at 6% nominal annual interest over 36 months costs about 304.22 per month, with 951.90 total interest.
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