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CalcMetrio

Loan Payment & Amortization Calculator

Enter the annual interest rate quoted by your bank to calculate installments and see exactly how each payment is divided between principal, interest and fees. Compare reducing-balance and flat-rate methods using US APR, European APRC or GCC disclosure views.

Last reviewed: 2026-09-02

Loan Payment & Amortization Calculator inputs

Fill in the fields below, then select Calculate. Nothing is submitted automatically.

The principal amount borrowed from the bank.

Enter the contractual annual interest rate quoted by your bank, such as 4 or 4.25. Do not substitute APR unless it is also the contractual rate.

Enter the repayment period in years, up to 50.

How often installments are paid.

Choose the method stated by your bank. Reducing balance is the usual amortized-loan method.

Changes how the estimated annual cost rate is displayed; it does not replace your bank's contract.

Mandatory origination, arrangement or processing fees paid at the start.

Any mandatory fee added to each installment.

Changing the currency changes formatting only. It does not convert values between currencies.

Calculations run locally in your browser. Your figures are not sent to a server or stored by us.

Results

Enter your figures above and select Calculate. Results appear here with clear labels — never colour alone.

How loan payments are calculated

Most mortgages and long-term bank loans use an amortized reducing-balance method. Interest is calculated on the outstanding principal for each payment period. The payment usually remains level, while the interest portion falls and the principal portion rises over time.

Some lenders quote a flat or add-on rate. Flat interest is calculated on the original loan amount for the entire term, even as the balance is repaid. A flat rate and a reducing-balance rate with the same percentage do not have the same borrowing cost.

Enter the contractual interest rate stated by your bank. APR or APRC is a comparison measure that may include mandatory fees and is not always the rate used to calculate the installment.

Loan payment formulas

  • Reducing-balance payment = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)
  • Interest for each period = Opening balance × periodic rate
  • Principal for each period = Payment − Interest
  • Flat-rate interest = Principal × annual rate × years
  • Total amount paid = Principal + Interest + Mandatory fees

P is the loan principal, r is the interest rate per payment period, and n is the total number of payments. Calculations retain full precision internally and round only displayed amounts.

Example: $1,000,000 at 4% for 25 years

For a $1,000,000 loan, a 4% fixed annual rate, monthly payments and a 25-year term, the reducing-balance payment is approximately $5,278.37.

  • Number of payments = 25 × 12 = 300
  • Monthly payment ≈ $5,278.37
  • Total interest ≈ $583,510.52
  • Total paid ≈ $1,583,510.52
  • First payment: $1,945.04 principal + $3,333.33 interest

With a 4% flat rate over the same 25 years, total interest would be $1,000,000 and the monthly payment would be about $6,666.67. This is why confirming the bank's calculation method matters.

How to use the calculator

  1. Enter the amount you will actually borrow.
  2. Enter the annual contractual interest rate supplied by the bank.
  3. Enter the loan term and select the payment frequency.
  4. Choose reducing balance or flat rate exactly as described in the offer.
  5. Choose the disclosure view used for comparison: United States APR, European APRC, GCC APR or international effective annual cost.
  6. Add mandatory upfront and per-payment fees if you want an estimated total annual borrowing cost.
  7. Review the totals and open or download the complete amortization schedule.

US, European and GCC disclosure views

The core amortization payment is driven by the contractual rate, term and payment frequency. Regional disclosure standards mainly affect how fees and the annual cost of credit are presented.

  • United States APR: an annualized comparison rate derived from the amount financed and scheduled payments.
  • European Union APRC: an annual effective cost measure intended to include mandatory borrowing costs.
  • GCC comparison: an estimated effective annual cost using the entered fees. Individual GCC regulators and banks may apply country-specific timing, day-count and product rules.
  • International: an effective annual cost estimate for general comparison.

This calculator uses equal payment periods. A bank's final schedule can differ because of exact disbursement dates, daily interest, 365/360 day-count conventions, variable benchmark rates, payment holidays, insurance, taxes or rounding rules.

Common mistakes

  • Entering APR instead of the contractual rate. APR may include fees and may not be the rate used for the installment.
  • Confusing flat and reducing rates. A 4% flat loan is substantially more expensive than a 4% reducing-balance loan over a long term.
  • Leaving out mandatory fees. Arrangement and recurring fees increase the true borrowing cost.
  • Comparing different frequencies directly. Monthly, biweekly and weekly schedules have different numbers of payment periods.
  • Treating an estimate as a bank quotation. Always confirm the final repayment schedule and disclosure document with the lender.

Frequently asked questions

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Disclaimer

Results from this calculator are estimates for general information only and are not financial, accounting, tax, investment or legal advice. Verify important figures with a qualified professional. Read our full disclaimer.