Simple Interest Loan Calculator

A simple interest loan is a type of loan where interest is calculated only on the principal amount, not on previously accrued interest. This differs from compound interest loans, where interest accumulates on both the principal and previously earned interest. Simple interest loans are commonly used for personal loans, auto loans, and short-term financing.

How Simple Interest Works

The calculation for simple interest is straightforward: Interest = Principal × Rate × Time. For example, if you borrow $10,000 at an annual interest rate of 5% for 5 years, the total interest would be $10,000 × 0.05 × 5 = $2,500. The total amount to be repaid would be $12,500, which is divided equally across all payment periods.

Monthly vs. Bi-Weekly Payments

This calculator supports both monthly and bi-weekly payment frequencies. Monthly payments are made 12 times per year, while bi-weekly payments occur 26 times per year (every two weeks). Bi-weekly payments can help you pay off your loan faster and reduce total interest paid, as you make one extra payment per year compared to monthly payments.

Benefits of Extra Payments

Making extra payments on your simple interest loan can significantly reduce the total interest you pay and shorten your loan term. You can make monthly extra payments or one-time lump sum payments. Each extra payment reduces your principal balance, which means less interest accrues over the remaining loan term. Our calculator shows you exactly how much interest you'll save and how many payment periods you'll eliminate.

Amortization Schedule

The amortization schedule provides a detailed breakdown of each payment, showing how much goes toward principal, how much goes toward interest, and your remaining balance after each payment. This schedule helps you understand the loan repayment process and plan your finances accordingly. You can export the schedule to Excel for further analysis or record-keeping.

Simple Interest vs. Compound Interest

Simple interest loans are generally more straightforward and predictable than compound interest loans. With simple interest, you know exactly how much interest you'll pay over the life of the loan from the start. This makes budgeting easier and helps you make informed decisions about extra payments. However, simple interest loans may have slightly higher interest rates than compound interest loans, so it's important to compare options.

Using This Calculator

Our simple interest loan calculator helps you calculate monthly or bi-weekly payments, total interest, and create a complete amortization schedule. Simply enter your loan amount, annual interest rate, loan term, and payment frequency. You can also enable extra payments to see how they affect your loan payoff timeline and total interest paid. The calculator is particularly useful for personal loans, auto loans, and other short to medium-term financing needs.

Excel Export Feature

The calculator includes an Excel export feature that allows you to download your complete payment schedule as a CSV file. This is especially useful for financial planning, tax purposes, or sharing with financial advisors. The exported file includes all payment details, making it easy to track your loan progress and plan future payments.

Whether you're planning a personal loan, auto loan, or any other simple interest loan, this calculator provides the tools you need to make informed financial decisions. Use it to compare different loan terms, payment frequencies, and extra payment scenarios to find the best option for your financial situation.