Interest Rate Calculator

Select Currency:

Loan amount

$

Loan term

years

months

Monthly payment

$

Interest rate

-

Total payments

-

USD

Total interest

-

USD

Loan Amortization Graph

Payment Breakdown

Amortization Schedule

Year	Principal	Interest	Balance

Export Results

Calculation History

Date	Loan Amount	Term	Monthly Payment	Interest Rate	Currency	Actions

No Calculation History

Your calculation history will appear here after you save calculations.

This calculator helps determine the actual interest rate when you only know the monthly payment amount.

Calculation saved to history

Understanding Your Interest Rate Calculator

A complete guide to calculating the real interest rate when you only know your monthly payment

What Is an Interest Rate Calculator?

An interest rate calculator helps you determine the real annual interest rate on a loan when you only know:

• The total loan amount
• How long you'll be paying (loan term)
• Your monthly payment amount

This is incredibly useful because lenders often tell you "you'll pay $X per month" without clearly stating the actual interest rate.

Understanding the Calculator Fields

Loan Amount

What it is: The total amount you're borrowing

Example: $22,000 for a new car

Tip: This is the principal amount before any interest is added

Loan Term

What it is: How long you have to repay the loan

Example: 5 years and 0 months

Tip: Shorter terms = higher monthly payments but less total interest

Monthly Payment

What it is: The amount you pay each month

Example: $760 per month

Tip: This includes both principal repayment and interest

Real-World Example

Let's say you're buying a car:

• Loan Amount: $22,000
• Loan Term: 5 years (60 months)
• Monthly Payment: $760

After calculation, you'll discover the actual interest rate is about 10.5% per year!

Total Interest Paid: Approximately $2,600 over 5 years

The Math Behind the Calculation

The Formula We Use

Our calculator uses the Newton-Raphson method to solve this complex equation:

P × r × (1 + r)^n / ((1 + r)^n - 1) = M

Where:

• P = Loan amount (principal)
• r = Monthly interest rate (what we're solving for)
• n = Total number of payments (loan term in months)
• M = Monthly payment

Step-by-Step Example Calculation

For our $22,000 loan at $760/month for 5 years:

Total Payments = Monthly Payment × Number of Months
Total Payments = $760 × 60 = $45,600

Total Interest = Total Payments - Loan Amount
Total Interest = $45,600 - $22,000 = $23,600

Monthly Interest Rate ≈ 0.875% (calculated using Newton-Raphson)
Annual Interest Rate = 0.875% × 12 = 10.5%

Key Features of Our Calculator

Multi-Currency Support

Calculate interest rates in 51 different currencies including USD, EUR, GBP, JPY, and many more. The calculator automatically adjusts currency symbols and formatting.

Visual Charts & Graphs

See your loan breakdown with:

• Amortization chart: Shows yearly principal vs. interest payments
• Pie chart: Visual split between principal and interest
• Amortization schedule: Year-by-year payment breakdown

Calculation History

Save up to 50 calculations to compare different loan scenarios. You can:

• Save current calculations
• Load previous calculations
• Export history as CSV
• Clear history when needed

Export & Save Results

Save your calculations in multiple formats:

• TXT: Plain text for easy sharing
• HTML: Web page format
• PDF: Professional document
• Print: Direct printing with optimized layout

What Is Amortization?

Amortization is the process of paying off a loan through regular payments. Each payment includes:

• Principal portion: Reduces the loan balance
• Interest portion: Pays the cost of borrowing

In the beginning, most of your payment goes toward interest. As time passes, more goes toward reducing the principal.

Frequently Asked Questions

1. Why can't I just divide the total interest by the loan amount?

Because interest compounds over time. Simple division doesn't account for the fact that you're paying interest on a decreasing balance as you repay the loan.

2. Is this the same as APR (Annual Percentage Rate)?

Yes! The annual interest rate calculated is essentially the APR, which includes the base interest rate plus any additional fees expressed as an annual rate.

3. Why does the calculator show negative interest rates sometimes?

If your monthly payment is less than what's needed to repay just the principal (no interest), the calculator might show a negative rate. This usually means there's an error in your inputs.

4. What if I make extra payments?

Extra payments reduce your principal faster, which means you'll pay less total interest. Our calculator shows the standard schedule - for extra payments, you'd need to recalculate with a shorter term.

5. Does this work for credit cards?

Credit cards work differently because they have revolving credit and minimum payments that change. This calculator is best for fixed-term loans with set monthly payments.

6. What's the difference between interest rate and APR?

The interest rate is the cost of borrowing the principal. APR includes the interest rate plus other fees and costs. Our calculator effectively shows the APR.

7. Can I use this for mortgage calculations?

Absolutely! This calculator works perfectly for mortgages, car loans, personal loans, and any other fixed-term installment loans.

8. Why do I need to know the interest rate?

Knowing the true interest rate helps you:

• Compare different loan offers
• Understand the real cost of borrowing
• Make informed financial decisions
• Budget for the total cost of the loan

9. What if I have fees included in my loan?

Include any fees in the "Loan Amount" field. For example, if you borrow $20,000 but pay $500 in fees, enter $20,500 as your loan amount.

10. How accurate is the calculator?

Our calculator uses precise mathematical methods (Newton-Raphson) that are accurate to 6 decimal places for interest rates. It's more than accurate enough for personal finance decisions.

11. What happens if I change currency?

The calculator converts amounts using current exchange rates and updates all currency symbols. The interest rate calculation remains the same regardless of currency.

12. Can I save my calculations?

Yes! Use the "Save to History" button to store calculations. You can save up to 50 calculations and export them anytime.

13. What is an amortization schedule?

It's a table showing how each payment is split between principal and interest, and how your loan balance decreases over time. Our calculator provides a yearly schedule.

14. Why does interest cost so much over time?

Because of compound interest. You pay interest on the remaining balance, and since early payments are mostly interest, it takes time to make significant progress on the principal.

15. How can I reduce my interest costs?

Three main ways:

1. Get a lower interest rate (shop around!)
2. Choose a shorter loan term
3. Make extra payments when possible