Look beyond the monthly payment
A longer term can make the payment smaller while increasing the total interest. The useful comparison is both numbers together: whether the payment fits your budget and what borrowing costs over the full term.
A worked example
Borrow $12,000 at 6% annual interest for 36 months. The monthly payment is approximately $365.06, with about $1,142.28 in total interest before fees. At 0%, the same loan would be $333.33 a month before rounding the final payment.
The repayment calculation
For monthly rate r, principal P, and n payments, payment = P × r ÷ [1 − (1 + r)^−n]. We divide the annual percentage rate entered as an interest rate by 1,200 to get r. If the rate is zero, payment = P ÷ n.
What this estimate assumes
The rate stays fixed, payments arrive on time, and interest accrues monthly. Fees, payment holidays, late charges, insurance, and prepayments are not included. The chart groups principal and interest by repayment year; it is not a lender’s official schedule. Use the interest rate for payment math and compare APR separately when assessing the cost of an offer.