Loan Calculator

Estimate a fixed monthly loan payment

Enter the amount borrowed, annual interest rate, and repayment term to estimate the fixed monthly payment, total repayment, and total interest. Reading all three results gives more context than looking at the monthly payment alone.

SnakTool models a fixed-rate, fully amortizing loan with equal monthly payments. The entered annual rate stays constant in the calculation and the term is converted to a whole number of monthly payments.

How the loan payment formula works

For a positive rate, the calculator uses the standard amortizing-loan formula: M = P × r / (1 − (1 + r)^−n). M is the monthly payment, P is the principal, r is the monthly interest rate, and n is the number of monthly payments.

The annual percentage entered in SnakTool is divided by 1200 to produce the monthly decimal rate. For example, 6% becomes 0.005 per month, while a two-year term becomes 24 monthly payments.

Example: 12,000 at 6% for 24 months

For a principal of 12,000, an annual rate of 6%, and a 24-month term, the monthly rate is 0.005. The fixed-payment formula gives a monthly payment of about 531.85.

Using the unrounded payment in the totals, the estimated total repayment is about 12,764.34 and total interest is about 764.34. Total repayment includes the original principal; total interest is the amount above that principal in this model.

Input

12,000 principal · 6% annual rate · 24 months

Method

Monthly rate 0.005 · fixed monthly amortizing payment

Result

531.85 monthly · 12,764.34 total repayment · 764.34 total interest

How the loan term changes monthly payment and total interest

With the principal and annual rate held constant, spreading repayment across more months usually reduces the required monthly payment. The balance also remains outstanding for longer, so the model can produce more total interest over the full term.

A shorter term generally produces the opposite pattern: fewer payment periods and a larger monthly payment, with less time for interest to accumulate. Compare the monthly payment and total interest together when testing different terms.

How the interest rate changes the same loan

With the principal and term unchanged, a higher annual interest rate produces a higher monthly payment and more total interest in this fixed-rate model. The effect becomes more noticeable across larger balances or longer terms.

To isolate the effect of the rate, keep the amount and term unchanged and calculate each rate separately. Changing several inputs at once makes it harder to see which input caused the difference.

What total repayment and total interest mean

Total repayment is the monthly payment multiplied by the number of monthly payments. It combines the returned principal with the interest generated by the model. Total interest is total repayment minus the original principal.

These outputs describe different parts of the same calculation: monthly payment shows the recurring modeled amount, while total interest shows the modeled interest accumulated across the complete term.

Interest rate and APR can represent different figures

This calculator uses the annual interest rate entered as the rate for its payment formula. APR can include certain additional borrowing costs as well as interest, depending on the product and applicable disclosure rules, so the two figures should not automatically be treated as identical inputs.

When reproducing figures from a specific loan document, check which rate the document uses for its payment calculation and note any costs that are handled separately.

What is not included in this loan estimate

SnakTool uses principal, annual interest rate, and term only. It does not model origination or arrangement fees, insurance, taxes, closing costs, variable rates, balloon payments, irregular payment dates, late charges, or optional extra repayments.

Because those items can affect real repayment figures, the calculator output is a mathematical estimate for the three entered inputs rather than a complete lender cost calculation.

How a 0% interest loan is calculated

The standard amortization formula has a zero denominator when the monthly rate is zero. SnakTool handles 0% interest separately by dividing the principal evenly across the number of monthly payments.

For example, 1,200 at 0% over 12 months gives a monthly payment of 100, total repayment of 1,200, and total interest of 0. The term must contain at least one whole month, and the principal and annual rate cannot be negative.

A fixed payment does not mean equal principal and interest each month

In a standard amortizing loan, the scheduled payment can stay the same while the way that payment is divided between interest and principal changes over the term. Interest is associated with the outstanding balance, so earlier payments generally contain a larger interest share than later payments when the rate and payment schedule are fixed.

SnakTool uses the amortizing-payment formula to calculate the fixed monthly amount and the full-term totals, but the current tool does not display a month-by-month amortization schedule. Its total-interest result is therefore a summary for the complete modeled term rather than a list of each payment's principal and interest portions.

References

• CFPB: interest rate versus APR