Loan Calculator

Loan Calculator: Monthly Payment and Amortization

This loan calculator computes the monthly payment, total cost and total interest of an annuity loan. Either fix a term and get the payment, or enter a target payment and see how long repayment takes. A clear amortization schedule shows the remaining balance at each year-end. Because interest rates change all the time, the results are for orientation, not a binding offer. For context, as of September 2026: installment loans currently cost a nominal rate of around 6 to 9 %, while a mortgage with a 10-year fixed term runs at about 4.2 % (Interhyp, as of 10 Sep 2026).

What is an annuity loan?

In an annuity loan the monthly payment stays constant for the whole term. At first it consists mostly of interest; over time the repayment share grows until the loan is fully paid off. The calculation uses the nominal rate p.a., the pure credit interest, and the loan amount. Banks quote both the nominal rate and the effective annual percentage rate (APR), which includes fees and is more meaningful for comparing offers.

How the monthly payment is calculated

The tool uses the standard annuity formula for the constant monthly payment:

M = K × r ÷ (1 − (1 + r)^−n)

Here M is the monthly payment, K the loan amount, r the monthly interest rate (annual rate divided by 12) and n the number of months. From this monthly factor every payment is split into interest and principal, so the balance reaches zero at the end of the term.

Example: You borrow 20,000 at 5% p.a. over 5 years. The monthly rate is 0.05 ÷ 12 ≈ 0.004167 and the term is 60 months. This gives a monthly payment of about 377.42, a total repayment of about 22,645 and total interest of roughly 2,645. Current rate levels move constantly, so check your bank\'s up-to-date conditions before deciding.

What it can and cannot do

• Monthly payment: from loan amount, rate and term.
• Term: from loan amount, rate and a target payment.
• Amortization schedule: remaining balance and cumulative interest at each year-end.

Important: The tool models the pure annuity and uses the assumed nominal rate. It does not include fees, discount points or credit insurance, and therefore does not match the effective annual percentage rate (APR), which includes these costs. A seemingly low nominal rate can be more expensive in practice than a higher fee-free one.

What the calculator is useful for

• Orientation: A rough idea of which monthly payment fits which term.
• Comparison: Check two annuity options with different interest rates side by side.
• Budget planning: See whether a planned payment allows any repayment at all.

Key relationships worth knowing

A longer term lowers the monthly payment but raises the total interest cost, because interest accrues over more months. A shorter term works the other way. Because of compounding, even a small difference in the nominal rate is clearly noticeable over long terms. So always compare the total cost, not just the monthly payment.

A common misconception is that the interest share stays constant over the term. In reality it falls with every payment while the repayment share rises. Early on you mostly pay interest, toward the end mostly principal. Planned extra repayments shorten the term further, but this calculator does not model them.

What the calculator does not model

The tool works with a constant annuity and without extra repayments, without interest-rate lock changes and without variable rates. Lump-sum payments that shorten the term or lower the payment must be checked separately. A discount point (Disagio) is not included either. For such cases it is best to contact your bank or a credit adviser.

Note: Status as of September 2026. This calculation is a mathematical estimate based on the nominal rate entered, not a binding offer or financial advice. Banks may add origination fees, discount points or credit insurance. Contact your bank for a binding offer and check the stated APR.

Frequently asked questions

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How the calculator works in detail

At its core the tool applies the annuity formula to a constant monthly payment. From the loan amount, the nominal rate and the term it derives the monthly factor that splits every payment into interest and principal. Early on the interest share is high and the principal share low. With each payment the remaining balance falls, so the interest share shrinks proportionally while the principal share grows. At the end of the agreed term the balance is, in accounting terms, zero. The amortization schedule reports the year-end state, namely the remaining balance and cumulative interest after twelve months.

An example shows the logic: with 20,000, 5 percent nominal rate and a 5-year term, the monthly payment is about 377. In the first month roughly 83 of that goes toward principal and the rest is interest. Twelve months later the balance has dropped to just over 16,300. The final month consists almost entirely of principal, because little interest is left. Vary the target payment and you immediately see how the term until full repayment changes.

What really drives the total cost

Two levers decide the total cost: the interest rate and the term. A longer term lowers the monthly payment but extends the time interest accrues, so the total cost rises even though each single payment is smaller. Conversely a higher monthly payment shortens the interest phase noticeably. This is the most common reason a seemingly cheap loan turns out more expensive over time.

Equally important is the difference between the nominal rate and the effective APR. The nominal rate describes only the pure interest on the amount borrowed. The effective APR also includes origination fees and other costs, which makes it the more meaningful figure for comparing offers. Market rates change constantly, so before you decide, check a current official comparison such as lender-published rate tables or an independent finance portal.

How to use the result

The calculator works well for a first orientation and for quickly comparing different options. It does not replace professional advice or a binding offer. Real contracts often include prepayment rights, discount points or credit insurance that this tool does not model. A credit adviser or your bank can put these points into perspective and weigh affordability against your household income and existing commitments.

Does the tool really run locally?

Yes, 100 %. All calculations happen right in your browser, with no server and no account. Your entries are neither transmitted nor stored. You can safely try different rates and terms, your data stays on your device.