Loan Interest Calculator

Estimate how much interest you will pay on a loan with fixed monthly payments (amortizing loan). Enter principal, rate, and term to see total interest.

Monthly Payment

Total Payment

Total Interest

Simple Interest Calculator

Calculate simple interest using the formula I = P × R × T, where P is principal, R is the annual rate (as a decimal), and T is time in years. Used for some short-term loans, savings, or bonds.

Simple Interest (I)

Total Amount (P + I)

These interest calculators provide estimates for informational purposes only. Return to the LoanWise home page.

Simple Interest Calculator

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Simple Interest vs Loan Interest

Simple interest is calculated on the original principal only: I = P × R × T. The interest does not compound. It’s common for some short-term loans, certificates of deposit, or bonds. Loan interest (amortizing) applies to most mortgages, auto loans, and personal loans—interest is charged on the remaining balance each month, so early payments are mostly interest and later payments are mostly principal. Total interest on an amortizing loan is higher than simple interest over the same period for the same rate.

When to Use Each Formula

Use the simple interest calculator when you know principal, annual rate, and time in years and want the interest or total. Use the loan interest calculator when you have a loan with fixed monthly payments and want to see total interest, monthly payment, and total payback.

Frequently Asked Questions

What is the simple interest formula?
Simple interest = Principal × Rate × Time (I = P × R × T). Rate is expressed as a decimal (e.g. 5% = 0.05), and time is in years.
Why is total interest higher on a loan than simple interest?
Amortizing loans charge interest on the outstanding balance each period. Early on you owe more, so more interest accrues. Simple interest uses only the original principal for the whole period.
Does the simple interest calculator use compounding?
No. Simple interest does not compound. Interest is calculated once on the principal. For compound interest, you’d need a different formula.