Simple Interest Loan Calculator United States
This simple interest loan calculator uses the principal, rate and term to show total interest, total repayment and a level monthly payment.
What it does
The Simple Interest Loan Calculator finds the interest, total repayment, and monthly payment on a loan where interest is charged only on the original principal.
Data sources & parameters
This calculator uses standard financial formulas and runs entirely in your browser. It needs no external rate data — your result is computed only from the values you enter above.
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
Interest = principal x rate x years; total = principal + interest; monthly = total / (years x 12)
How it works
It multiplies the principal by the annual rate and the term in years to get the interest, adds it to the principal, and spreads the total across the months of the term.
Where it is used
- Estimating the cost of a simple interest loan
- Finding a level monthly payment
- Comparing simple interest against compounding loans
Worked example
A $10,000.00 loan at 6% simple interest over 5 years costs … in interest, for a total of … and a monthly payment of ….
What the simple interest loan calculator does
The calculator works out the full cost of a loan on which interest is charged only on the original amount borrowed. Enter the principal, the annual interest rate as a percentage and the term in years, and it returns the total interest, the total you will repay, and a level monthly payment, with the repayment split into principal and interest.
Because interest never builds on earlier interest, the total cost is fixed once the rate and term are set. Many short-term personal loans, some auto loans, and many informal or family loans use simple interest.
The formula
- Interest equals the principal multiplied by the annual rate multiplied by the term in years.
- Total repayment is the principal plus that interest.
- Monthly payment is the total repayment divided by the number of months in the term.
Borrow $10,000 at a 6% annual rate for five years and the interest is $10,000 × 0.06 × 5 = $3,000. The total repayment is $13,000, and spread across sixty months the level payment is about $216.67.
Simple interest versus compound interest
With compound interest, each period's interest is added to the balance and then earns interest itself, so the total accelerates. Simple interest is tied to the original principal and grows in a straight line however long the loan runs.
Over the same rate and term, a simple interest loan always costs a borrower less than a compounding one. Two loans quoting the same percentage can cost very different amounts depending on whether interest compounds, so check which method a lender uses as well as the rate. The calculator gives you the simple interest figure as a baseline.
How the monthly payment is built
Some simple interest loans are repaid as one lump sum at maturity; others are split into equal installments. This tool models installments: it divides the total repayment evenly across every month of the term, so you know from the start what each month will cost and what the loan will total.
Terms can be anything from a few months to several decades, and fractional years such as 0.5 or 1.5 work, so a six-month or eighteen-month loan is as easy to price as a five-year one.
What the result leaves out
The output covers interest only. It does not include charges real lenders often add, such as origination fees, documentation charges or required insurance. Those raise the APR above the plain interest rate, so when comparing real offers, look at the APR and the total of all charges, not just the interest rate.
This is general information only and not financial advice.
About This Simple Interest Loan Calculator
Use this simple interest loan calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Frequently asked questions
What is a simple interest loan?
How is simple interest different from compound interest?
How is the monthly payment calculated here?
Does this include fees or APR?
Can I use it for any loan term?
Is my data private?
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