Loans calculators

A loan is a contract: you receive a lump sum today and agree to pay it back, with interest, on a fixed schedule. The total amount you repay depends on three numbers — principal, rate, and term — but the headline rate alone is rarely enough to compare offers. Two loans with identical rates can have wildly different total costs once fees, repayment frequency, and balloon structures are included.

These calculators are designed to expose the total cost of borrowing, not just the monthly payment. Whether you're comparing personal loan offers, modelling a car loan with a balloon, evaluating a debt-consolidation pitch, or running a head-to-head loan-comparison spreadsheet, the engine returns the same set of unbranded numbers: total repaid, total interest, effective rate, and amortisation schedule.

All maths uses 20-digit decimal precision and the standard amortisation formula. We make no assumptions about credit checks, eligibility, or jurisdiction-specific consumer law. The output is the loan economics — what you would pay if everything in the contract is honoured exactly as written.

How loan interest is calculated

Most consumer loans are amortising: each repayment covers the interest charged since the last payment, and the rest reduces the principal. Early repayments are interest-heavy because the balance is high; late repayments are principal-heavy because the balance has fallen. The total interest paid is the difference between the principal borrowed and the sum of all repayments.

Some loan structures break this pattern. Interest-only loans defer principal entirely until the end of the term, leaving you with the original debt at maturity. Balloon loans amortise on a schedule shorter than the term, leaving a large lump sum due at the end. Both structures lower the periodic payment but raise the total cost of borrowing — sometimes dramatically.

The personal-loan calculator runs the standard amortisation formula and shows the schedule. Use it before you accept any quote: a "low monthly payment" loan offered by a comparison site is often a long-term loan masking a high total cost. Same monthly payment, different total bill.

Comparing loan offers

A comparison rate (sometimes called annual percentage rate, APR, or effective rate) bundles the headline interest rate with standard fees — establishment, ongoing account fees, redraw fees — into a single annual figure. Loans with similar headline rates can have comparison rates 1–2 percentage points apart once fees are included. The comparison rate is the right number to compare across lenders for a like-for-like loan.

Even comparison rates can mislead, however, because they assume a standard loan size and term. A $30,000 loan over 5 years has a different effective fee burden than a $5,000 loan over 1 year, even at the same comparison rate. The loan-comparison calculator lets you plug in the actual loan parameters and returns the actual total cost — fees included.

Beyond rate and fees, three structural variables matter: the term (longer terms reduce monthly payments but increase total interest), the repayment frequency (more frequent payments reduce total interest), and any balloon or residual payment (artificially lowers monthly payments at the cost of a lump sum later).

Types of personal loans

Personal loans split along two main dimensions: secured vs unsecured, and fixed vs variable rate. Secured loans use an asset as collateral (typically a vehicle or savings account) and offer lower rates because the lender has recourse if you default. Unsecured loans charge a higher rate as compensation for the lender's higher risk.

Fixed-rate loans give you certainty: the rate cannot change for the term, and the monthly payment is locked in. Variable-rate loans rise and fall with the market — useful in a falling-rate environment, painful in a rising one. Personal loans are typically fixed-rate; lines of credit are typically variable.

Debt consolidation is a special case of personal loan where the proceeds are used to pay off existing higher-rate debts. The economics work only if the weighted average interest rate of the consolidated debts exceeds the new loan's effective rate (rate + fees), and only if the new term doesn't extend so far that the lower rate is offset by the longer repayment period.

Car loans and balloon payments

Car loans are typically structured over 3–7 years with either full amortisation or a balloon residual at maturity. A balloon payment lowers the monthly cost during the loan but leaves a lump sum due at the end — typically 20–40% of the original principal, depending on the term.

The arithmetic works against the borrower. A $40,000 car loan over 5 years at 8% with no balloon costs roughly $48,700 total. The same loan with a 30% balloon costs roughly $50,800 — and you still owe $12,000 at maturity. Balloon loans transfer cost from the monthly cash-flow into a single large bill at the end, often forcing borrowers to refinance the residual into a second loan.

Use the car-loan calculator to see the full repayment schedule with and without a balloon. The comparison usually clarifies: balloon structures suit business owners who can deduct interest and want to manage cash flow, but for most personal buyers the lower monthly payment is just deferred cost with extra fees.

When refinancing pays off

Refinancing replaces an existing loan with a new one, typically at a lower rate or with different terms. The break-even calculation is straightforward: refinance fees divided by monthly payment saving equals months to break even. If you keep the new loan past the break-even month, refinancing pays off; if you sell the underlying asset, pay off the loan early, or refinance again before that point, the fees outweigh the savings. A typical mortgage refinance has $2,000–$5,000 in fees and saves $100–$300 per month — break-even arrives somewhere between month 10 and month 30. Anyone holding the loan a few years past that range comes out ahead.

The most common avoidable mistake in refinancing is the cash-out variant — extracting equity from a property by refinancing into a larger loan. The headline benefit is access to capital at a lower rate than unsecured borrowing; the hidden cost is that the new principal includes both the original loan and the cashed-out amount, paid back over a fresh long term. A $50,000 cash-out at 6% over 25 years adds roughly $46,000 in interest charges across the new schedule — often more than the same $50,000 saves when used to pay down higher-rate debt. Run the loan-comparison calculator on the consolidated path before treating cash-out refinancing as cheap money.

Daily interest is the underappreciated lever in any loan decision. Most consumer loans accrue interest daily on the outstanding balance even though payments arrive monthly — which means an extra payment a few days before the monthly due date saves slightly more interest than the same payment a few days after. Across a 25-year mortgage, a consistent payment-on-receipt-of-salary pattern (say, two weeks early each month) typically shaves several thousand dollars off total interest paid. The daily-interest calculator quantifies this directly: enter the loan parameters and see what changing the timing of each repayment is worth in cumulative interest.