Calculate Loan Interest
Use this interest calculator to calculate how much interest you pay on a loan. Enter the loan amount, the total repayment amount and the term in months. The tool instantly shows both the flat interest rate and the effective compound interest rate.
Calculate loan interest | Monthly interest & effective interest calculator
This calculator is useful for:
- personal loans
- private loans
- credit cards
- buy now, pay later
- instalment payments
- personal financing
You can instantly see:
- total interest
- monthly interest
- annual interest
- effective compound interest
This gives you a quick overview of the actual cost of a loan.
What is flat interest?
With flat interest, interest is calculated only on the original loan amount. The interest therefore does not increase over the term.
Example:
- you borrow €1000
- you repay €1500
- total interest = €500
The interest is distributed evenly over the term.
What is compound interest?
With compound interest, new interest is continually calculated on the outstanding balance, including previously accrued interest. This causes the effective interest rate to rise more quickly.
This is also called:
- compound interest
- compound interest
- effective interest
.
Over longer terms, the difference between flat interest and compound interest can become significant.
How is interest calculated?
The tool calculates:
- total interest
- monthly interest
- effective monthly interest
- annual interest
- effective annual interest
Based on:
- loan amount
- total repayment amount
- number of months
This makes it easy to compare different loans.
How do you calculate interest on a loan?
You calculate interest by dividing the difference between the loan amount and the total repayment amount by the loan amount and the term.
What is a normal monthly interest rate?
That depends on the type of loan. Interest rates on standard loans are often much lower than those on short-term loans or buy now, pay later arrangements.
What is effective interest?
Effective interest takes compound interest into account. This provides a more realistic picture of the true cost of a loan.
What is the difference between flat interest and compound interest?
With flat interest, you pay interest on the original amount. With compound interest, you also pay interest on previously accrued interest.