Loan Calculator
Enter the loan amount, annual interest rate, and term to calculate monthly payments, total repayment, and total interest (equal installments).
How to Use
- Enter your loan principal in the "Loan Amount" field, e.g., 1000000.
- Enter the annual interest rate percentage in the "Annual Interest Rate" field, e.g., 2.5 for 2.5%.
- Enter the total number of repayment months in the "Loan Term" field, e.g., 240 for 20 years (20 × 12 = 240 months).
- Click "Calculate" to view the monthly payment, total repayment, and total interest.
- This calculator uses the equal installment (amortization) method, meaning fixed monthly payments throughout the loan term.
Amortization Formula
M = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ - 1)M: Monthly payment amount
P: Loan principal (the total amount borrowed)
r: Monthly interest rate = Annual rate ÷ 12 ÷ 100 (e.g., 2% annual → monthly = 0.02 ÷ 12 ≈ 0.001667)
n: Loan term in months (e.g., 20 years = 240 months)
Special case: When the annual interest rate is 0%, monthly payment = principal ÷ number of months.：
Calculation Example
Given:Loan of 1,000,000, annual interest rate 2%, term of 20 years (240 months)
Step 1:Calculate monthly rate → r = 2 ÷ 12 ÷ 100 = 0.001667
Step 2:Calculate (1 + r)ⁿ → (1.001667)²⁴⁰ ≈ 1.4907
Step 3:Apply the formula → M = 1,000,000 × 0.001667 × 1.4907 ÷ (1.4907 - 1) ≈ 5,058
Result:
- Monthly payment: approx. 5,058
- Total repayment: approx. 1,213,920
- Total interest: approx. 213,920
Important Notes
- This calculator uses the equal installment (amortization) method with fixed monthly payments.
- Actual loans may include additional fees such as origination fees, account management fees, and credit insurance, resulting in an APR higher than the nominal rate.
- Some banks offer tiered interest rates with lower rates in the early years and higher rates later. This calculator does not support such plans.
- Early repayment may incur prepayment penalties. Please check with your bank for details.
- Results are for reference only. Actual repayment amounts are subject to bank approval.
Frequently Asked Questions
What is the difference between equal installment and equal principal repayment?
Equal installment (amortization): Fixed monthly payments throughout the term. Interest makes up a larger portion in early payments, suitable for borrowers who prefer predictable monthly expenses.
Equal principal repayment: A fixed amount of principal is repaid each month plus interest on the remaining balance, so monthly payments decrease over time. Higher initial payments but less total interest.
For a 1,000,000 loan at 2% over 20 years, equal installment total interest is about 213,920, while equal principal total interest is about 200,833 — a difference of approximately 13,000.
What are annual and monthly interest rates? How do I convert between them?
The annual interest rate is the yearly rate published by banks, e.g., 2.5% means 2.5% of the outstanding principal is charged as interest per year. The monthly rate is the annual rate divided by 12, used for monthly interest calculations. For example, 2.5% annual = 2.5% ÷ 12 ≈ 0.2083% monthly. In calculations, convert the percentage to a decimal (0.2083% = 0.002083).
How can I shorten the loan term to save on interest?
Shortening the loan term is the most effective way to reduce total interest. For example, with a 1,000,000 loan at 2%, reducing the term from 30 to 20 years increases monthly payments from about 3,696 to 5,058, but total interest drops from about 330,564 to 213,920 — saving over 110,000. You can also make periodic extra payments to reduce the term.
What is the Annual Percentage Rate (APR)?
The Annual Percentage Rate (APR) converts all loan costs (including interest, fees, and charges) into an annualized rate, providing a more accurate picture of the actual cost of borrowing. Under Taiwan regulations, banks are required to disclose the APR for consumer comparison. The APR is typically slightly higher than the nominal interest rate.
What is a grace period? How does it affect repayment?
A grace period is an initial period during which only interest is paid without principal repayment, typically lasting 1–5 years. Monthly payments are lower during this period, but since the principal does not decrease, payments increase significantly afterward, and total interest also rises. For example, a 1,000,000 loan at 2% over 20 years with a 3-year grace period has monthly payments of about 1,667 during grace, rising to about 5,890 afterward.