PakFinanceGuidesKnow the cost before you sign
A loan advert shows a low monthly figure. This calculator also shows the total interest, which is the real price of borrowing.
The maths
It uses the same amortisation formula as mortgages: payment = amount x r / (1 - (1 + r)^-n), with r as the monthly rate and n as the number of months. Total interest equals payments made minus the amount borrowed.
Example
Borrowing $25,000 at 7.5% APR over 60 months costs about $501 a month, and you repay roughly $30,050 in total, so interest is close to $5,050. Stretching to 84 months lowers the payment but raises the interest.
How to pay less
Pick the shortest term you can afford, compare APRs from banks, credit unions and online lenders, and check for early repayment fees. A bigger deposit on a car loan helps too.
Heads up
Fees, insurance add-ons and variable rates can change the real cost. Read the agreement closely.
Frequently asked questions
What is APR?
The annual percentage rate shows the yearly cost of borrowing, usually including some fees.
Is a longer loan cheaper?
The monthly payment is lower, but total interest is higher.
Can I repay early?
Often yes, but some loans charge a fee. Check the terms.