Question 1

How is my monthly loan payment calculated?

Accepted Answer

It uses the standard amortization formula: payment = P·r / (1 − (1 + r)^−n), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the number of months. Each payment covers that month's interest first, and the rest reduces the balance.

Question 2

What's the difference between the interest rate and APR?

Accepted Answer

The interest rate is the cost of borrowing the principal. APR (annual percentage rate) also folds in certain fees, so it's usually slightly higher and is a better number for comparing loan offers side by side.

Question 3

Does paying more than the monthly payment help?

Accepted Answer

Yes. Any amount above the scheduled payment goes straight to the principal, which shrinks the balance faster and cuts the total interest you pay over the life of the loan.

Question 4

Is this loan calculator free to use?

Accepted Answer

Yes, it's completely free and works for personal loans, fixed-rate loans, and most instalment loans. Nothing is stored and no sign-up is needed.

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