Monthly payment calculator
An estimate on the amount borrowed. Arrangement fees, insurance and any early-repayment charge are not included.
The monthly payment on an amortising loan is P × r ÷ (1 − (1+r)^−n), where r is the monthly rate and n the number of payments. Twenty thousand at 8.5% over 60 months is 410.33 a month, and 4,620 of interest in total.
How to work out a monthly payment
Lengthening the term is the standard way to make a payment affordable and the standard way to pay far more overall. Going from 48 to 72 months on the same 20,000 loan cuts the monthly payment by about a third and increases total interest by roughly half. Lenders lead with the monthly figure precisely because it is the number that feels affordable, which is why the total-paid row deserves at least as much attention before signing.
Questions
P × r ÷ (1 − (1+r)^−n), with r the monthly rate and n the number of months.