About Loan Calculator
Calculate monthly loan payments, total interest, and full amortization schedules for any loan type. Compare loan terms side by side. Free, instant results.
How to use
- Enter the total loan amount (principal) you need to borrow — the full amount before interest. For example, the vehicle purchase price minus your down payment, or the total personal loan amount from your lender.
- Set the annual interest rate from your loan agreement or pre-approval quote. Canadian personal loan rates typically range from 6% to 15% depending on credit score, while car loans range from 4% to 9%. Secured loans generally offer lower rates than unsecured personal loans.
- Choose your loan term in months or years. A shorter term means higher monthly payments but significantly less total interest. A 5-year car loan at 6% on $30,000 costs $4,800 in interest, while the same loan over 7 years costs $6,800.
- Click Calculate to see your monthly payment, total interest cost, and total amount paid over the life of the loan. The summary gives you the critical numbers at a glance.
- Review the full amortization schedule to see how each payment splits between principal and interest. In the early months, more goes to interest — on a $25,000 loan at 7%, your first $495 payment sends $146 to interest and $349 to principal.
- Compare different scenarios by adjusting the rate or term. See how much you would save by negotiating a 0.5% lower rate, or what happens if you extend the term by a year.
- Use the results to determine whether you can afford the loan, or whether saving more for a larger down payment would reduce your borrowing costs.
Frequently asked questions
How is a monthly loan payment calculated?
Monthly payments use the standard amortization formula: M = P[r(1+r)^n] / [(1+r)^n - 1], where P is the principal, r is the monthly interest rate (annual rate divided by 12), and n is the total number of payments. For a $20,000 loan at 6% over 5 years: r = 0.005, n = 60, and M = $386.66. This calculator handles the math automatically and generates a full amortization schedule showing how each payment breaks down over the life of the loan.
What is the monthly payment on a $20,000 loan?
At 5% for 3 years, the monthly payment is $599 with $1,579 total interest. At 6% for 5 years, it drops to $387/month but total interest rises to $3,200. At 8% for 7 years, payments fall to $312/month but total interest jumps to $6,200. Longer terms lower your monthly payment but dramatically increase the total cost. Choose the shortest term where the monthly payment fits your budget.
Should I choose a shorter or longer loan term?
A shorter term costs less overall but requires higher monthly payments. On a $30,000 car loan at 6%: a 4-year term costs $3,800 in interest ($704/month), a 5-year term costs $4,800 ($580/month), and a 7-year term costs $6,800 ($445/month). The 7-year loan saves $259/month but costs $3,000 more total. Additionally, longer auto loans risk being underwater — owing more than the vehicle is worth.
What is an amortization schedule?
An amortization schedule is a complete table showing every payment over the life of your loan, broken down into principal and interest. Early payments are mostly interest — on a $25,000 loan at 7% for 5 years, your first $495 payment sends only $349 to principal. By the final year, nearly all of each payment goes to principal. Understanding this schedule explains why extra payments early in the term save the most interest.
How does my credit score affect loan interest rates?
In Canada, credit scores range from 300 to 900 and significantly impact loan rates. Excellent credit (750+) qualifies for prime or prime plus 1-2%. Good credit (700-749) adds 1-3% above prime. Fair credit (650-699) may see rates 5-8% above prime. Below 650, many traditional lenders decline the application. On a $20,000 loan over 5 years, the difference between 5% and 12% interest means paying $2,600 versus $6,700 in interest.
What is the difference between a secured and unsecured loan?
A secured loan is backed by collateral (car, home, or savings account) that the lender can seize if you default. An unsecured loan has no collateral. Secured loans offer lower rates because they are less risky for the lender: secured personal loans in Canada typically charge 4-8%, while unsecured personal loans charge 7-15%. Car loans and mortgages are secured by the vehicle and property respectively.
Should I make extra payments on my loan?
If your loan allows prepayment without penalty, extra payments directly reduce your principal and save interest on every future payment. On a $25,000 loan at 7% for 5 years, paying an extra $100/month saves $1,100 in interest and pays off the loan 10 months early. Check your loan agreement for prepayment terms — most Canadian personal and car loans allow extra payments without penalty. For mortgages specifically, use the
Mortgage Payoff Calculator to model how lump-sum prepayments and accelerated payments affect your amortization.
What is the difference between fixed-rate and variable-rate loans?
A fixed-rate loan locks in your interest rate for the entire term — your payment never changes. A variable-rate loan fluctuates with the prime rate, meaning payments can increase or decrease. Variable rates are typically lower initially but carry risk of increases. For budgeting certainty, fixed rates are safer. Most car loans in Canada are fixed-rate, while HELOCs and some personal loans are variable.
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