Loan Interest Rate Calculator
The interest rate you are really paying, from the amount, monthly payment and term.
Good to know. An offer that quotes only the monthly payment still has a rate. It is just not the number on the poster.
Not financial advice. Uses only the numbers and rates you enter — no live data.
How it works
In plain words
A loan’s payment comes from the amount, the rate and the term. Here the payment is known and the rate isn’t, so the calculator tries rates until the payment matches, to well under a hundredth of a percent.
The formula
payment = amount × i ÷ (1 − (1 + i)⁻ⁿ), with i = rate ÷ 12 solved for the rate
Worked example
Borrowing 20,000 and paying 396.02 a month for 60 months means a rate of 7%. Over the five years you pay 23,761.20, of which 3,761.20 is interest.
Sources
- Brealey, Myers and Allen, Principles of Corporate Finance, chapter 2 The standard formulas for loan payments, compounding and present value, the same as a spreadsheet’s PMT and FV.
Sources checked October 3, 2026. 4 automated tests check its answers on every change.
About the loan interest rate calculator
Some offers lead with the monthly payment and leave the rate in the small print, or never state it at all: a car dealer’s finance deal, a phone or furniture plan, a loan from a friend with a set repayment. If you know how much you borrow, what you pay each month and for how many months, the rate follows.
This is the rate of the loan itself, the nominal yearly rate behind the payments. If you also pay a setup fee or have to buy insurance with the loan, enter the amount you actually receive rather than the amount on paper: the rate then includes those costs, which is close to what the APR is meant to show.
Comparing loans by rate is fairer than comparing them by payment. A lower payment over a longer term can hide a higher rate, and a “0% finance” offer can still cost more than paying cash if it replaces a discount you would otherwise get.
To turn a rate into a payment, use the loan calculator; to compare two offers side by side, the loan comparison calculator.
Questions people ask
How do I find the interest rate on my loan?
From the amount borrowed, the monthly payment and the number of payments. 20,000 repaid at 396.02 a month for 60 months is 7% a year.
Why does the calculator search for the rate?
The payment formula can’t be rearranged to give the rate directly, so it is found by narrowing it down, which is how spreadsheets do it too.
Is this the APR?
It is the rate behind the payments. Enter the amount you actually receive, after any fees, and it comes close to the APR.