Repayment Calculator
Free Repayment Calculator for financial. Enter your values to compare options, see amortization, and plan smarter.
Formula
PMT = P[r(1+r)^n]/[(1+r)^n-1]
Standard amortization formula ensures fixed payments that cover interest and gradually reduce principal over the loan term.
Worked Examples
Example 1: Standard Loan Repayment
Problem:$25,000 loan at 8% for 5 years. Calculate payment and total interest.
Solution:Using formula: PMT = P[r(1+r)^n]/[(1+r)^n-1]\n\nP = $25,000\nr = 8%/12 = 0.667%\nn = 60 months\n\nPMT = $25,000 × [0.00667(1.00667)^60] / [(1.00667)^60-1]\nPMT = $25,000 × 0.0203\nPMT = $507/month\n\nTotal paid: $507 × 60 = $30,420\nTotal interest: $30,420 - $25,000 = $5,420
Result:$507/month | $5,420 interest
Example 2: Compare Loan Terms
Problem:$15,000 loan at 10%. Compare 36 vs 60 month terms.
Solution:36-month term:\nPayment: $484/month\nTotal: $17,424\nInterest: $2,424\n\n60-month term:\nPayment: $319/month\nTotal: $19,108\nInterest: $4,108\n\nDifference:\n60-month saves $165/month\n60-month costs $1,684 more total\n\nChoose 36 if you can afford $484/mo.
Result:36-mo saves $1,684 in interest
Example 3: Extra Payment Impact
Problem:$20,000 loan at 7%, 48 months. What if you pay $50 extra monthly?
Solution:Normal payment: $479/month\nPayoff: 48 months\nTotal interest: $2,983\n\nWith $50 extra ($529/month):\nPayoff: 42 months (6 months early!)\nTotal interest: $2,586\n\nSavings:\nTime: 6 months\nInterest: $397\n\nSmall extra payments have big impact.
Result:Pay off 6 months early, save $397
Frequently Asked Questions
How is loan repayment calculated?
Monthly payment = P[r(1+r)^n]/[(1+r)^n-1]. Each payment covers interest on remaining balance first, then the rest reduces principal. Early payments are mostly interest; later payments are mostly principal.
How do income-driven repayment plans work?
IDR plans cap monthly payments at 10-20% of discretionary income. Options include SAVE, PAYE, IBR, and ICR. Remaining balances are forgiven after 20-25 years of qualifying payments, though forgiven amounts may be taxable.
What is the standard repayment plan for federal loans?
The standard plan has fixed monthly payments over 10 years. This minimizes total interest paid but has higher monthly payments. Graduated plans start lower and increase every two years over 10 years.