Simple Loan Calculator

Calculate simple interest loan payments, total interest, and payoff schedule. Enter loan amount, APR, and term to get instant results with payment breakdown and schedule.

# Date Payment Interest Principal Balance

Full original guide (expanded)

How the simple interest calculation works

Simple interest applies a fixed percentage to the original principal for each period. The total interest is I = P × r × t where:

  • P = principal (original loan amount)
  • r = annual rate as a decimal
  • t = time in years

To get the per-period payment, divide the total cost by the number of payments. Because interest is linear, each payment includes the same interest amount and the same principal amount.

When simple interest loans make sense

  • Short-term loans (12 months or less) where you need quick estimates without compounding.
  • Automobile or personal loans that quote “simple interest” financing.
  • Bridge loans or family notes where payments are interest-only with principal due at maturity.

Tips for accurate results

  • Confirm whether the lender compounds interest. Many “simple interest” auto loans actually recalculate interest daily.
  • If payments are interest-only, set the payment frequency and look at the interest amount per period.
  • Compare against the amortized loan payment to see the cost difference when compounding is involved.

Frequently asked questions

How is simple interest different from amortized interest?

Simple interest uses a constant rate applied to the original principal. Amortized loans recalculate interest each period based on the remaining balance, so interest declines over time and payments remain fixed.

Can I model interest-only payments?

Yes. Set the payment frequency and observe the interest amount. If the payment equals the interest, the schedule will show principal remaining until a lump sum is applied.

What if my lender quotes a daily simple interest?

Convert the daily rate to annual (multiply by 365) and use that APR in the calculator. Remember that daily simple interest behaves more like amortized loans if payments are late.

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Formula (LaTeX) + variables + units
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Variables and units
  • P = principal (loan amount) (currency)
  • r = periodic interest rate (annual rate ÷ payments per year) (1)
  • n = total number of payments (years × payments per year) (count)
  • M = periodic payment for principal + interest (currency)
Sources (authoritative):
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Version: 0.1.0-draft
Last code update: 2026-01-19
0.1.0-draft · 2026-01-19
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  • Confirm sources are authoritative and relevant to the calculator methodology.
Verification pending · Last code update: 2026-01-19
Formulas

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Version 0.1.0-draft
Citations

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Changelog
  • 0.1.0-draft — 2026-01-19: Initial draft (review required).