Calculate your loan costs yourself without mathematical talent


Loan calculations seem complicated to many, and no wonder. Fortunately, even those who don’t consider themselves particularly mathematically gifted are able to learn a few formulas.

However, if you don’t want to spend your time on loan bills, you can jump straight into our loan comparison, which does the math for you and gives you an annual percentage rate:

Repayment method

Repayment method

Often, borrowers choose an annuity loan as their repayment method, as it is easy to budget their own finances into a steady, even expense item. Its good side is its predictability, but on the other hand it will be slightly more expensive than, for example, a flat-rate loan.

How do I calculate the cost and amount of an annuity loan?

How do I calculate the cost and amount of an annuity loan?

New things are best remembered when some example is used to illustrate them. So let’s say you apply for a $ 5,000 consumer credit with a 6% nominal interest rate, an opening fee of $ 150 and a monthly maintenance fee of $ 5 per month for two years. All expenses are added to the current loan amount.

In an annuity loan, the installment is calculated based on the assumption that all installments remain within the original payment plan. For example, if reference rates fluctuate, the monthly installment and price of the entire loan will be recalculated. The amount of the annuity can be calculated using the formula below with the date of the example


A = the amount of repayment
n = total installments = 24
m = number of installments per year = 12
p = interest rate = 6%
N = loan amount = 5000 €

After placing the numbers in the formula, the monster is tapped into the calculator with brackets. The same result can be achieved with less effort using spreadsheets. Just enter the formula = TAX (6% / 12.24; -5000) into the Excel cell and press Enter. The result of € 221.60 is equal to one installment.

Now you get the loan amount plus the nominal interest expense.

  • $ 221.60 x 24 = $ 5 318.4

To this amount must be added any other costs that you can see from the information provided by the lender. The opening fee may be a predetermined amount, or a percentage of the loan amount. An example opening fee of £ 150 and a monthly account fee of £ 5 will be added to the loan amount.

  • $ 150 + $ 5 x 24 months = $ 270
  • Therefore, the total cost of the loan is $ 5,558.5.

By far the easiest and fastest way is to use a spreadsheet program for interest rate calculations. Similarly, if you know the number of monthly installments (24), the amount of monthly installments (221.6) and the loan amount (5000), you can use the following formula: = INTEREST (24; 221.6; -5000) * 12. The result is rounded to 6%, ie the original nominal interest rate. To this must be added the account management fees and the opening fees of € 270 which are not taken into account by the formula. The difference between the nominal interest rate and the annual percentage rate of charge is that the annual percentage rate of charge also takes into account the charges on top of the nominal interest rate, which provides the current loan amount.

Loan is repaid in equal installments

Loan is repaid in equal installments

Always compare the loans based on the loan is repaid in equal installments, ie the total cost

Indeed, extra payments and the length of the loan can have a considerable impact on the interest rate and loan price. The formula for calculating the effective annual interest rate includes both account management and opening fees, but it is a bit more complicated and a long calculation by hand. However, it is also the best way to compare loans.

If you think you can’t swap the numbers in the formulas for fun of every loan quote you get, it’s easier to let someone else handle those bills for you in a loan comparison. Comparison saves you time, effort and money.