Installment Loan Calculator: Payment, Total Cost, APR

The calculator uses the standard amortization formula lenders use: each month, interest accrues on the remaining balance at the APR divided by twelve, your payment covers that interest first, and whatever is left pays the balance down. Enter an amount, an APR, and a term, and the tool returns the monthly payment, the total of payments, and the interest charge. The defaults model a common sovereign offer, $1,300 at 130% APR over 6 months: a $305.82 payment, $1,834.89 in total, and $534.89 in interest.

Here is the lesson the two outputs teach together. A payment can look manageable while the total is not. $305.82 a month for six months is a figure many households can find, but the $534.89 interest charge is the real price of the money, and it is more than forty percent of what you borrowed. Always read the total line before the monthly line.

The benchmark to test against is the licensed market. Virginia and Illinois cap credit at a 36% all-in figure; reset the APR field to 36 on the same $1,300 over 6 months and the payment falls to about $240, with total interest near $140. Credit unions can go lower still. The difference between those schedules is the value of a few minutes of comparison.