Simple Interest Loan Calculator
Interest that does not compound.
Simple interest, simple privacy — all math on your deviceYour payment breakdown appears here
Fill in the loan details and press Calculate — the monthly payment, total interest and schedule will render right on this page, with nothing sent to any server.
How to use
Simple interest is charged only on the original principal, never on accumulated interest. It is the model behind many short-term loans, payday-style products and some personal notes — and it behaves very differently from an amortizing loan.
How to use
- Enter the principal, the annual rate and the time in years.
- Press Calculate to see the simple interest and the total due.
Example
Borrow $5,000 at 10% for 2 years: the interest is 5,000 × 0.10 × 2 = $1,000, so you owe $6,000. If the same loan compounded monthly, the total would be closer to $6,104 — the difference grows with time.
Formula
Interest = principal × annual rate × time in years. There is no compounding; the rate applies to the original amount for the whole period.
Simple vs amortizing
Amortizing loans also charge interest on the falling balance each period — effectively simple interest recalculated monthly. The difference matters over long terms: an amortizing loan charges interest only on what remains, while a simple-interest loan quoted as a flat amount charges the full figure regardless.
Short-term math
For loans under a year, convert time to a fraction — 6 months is 0.5 years. A $1,000 loan at 12% for 6 months costs $60 of interest; the annualized rate is the same 12% only because the term is a clean half year.
Flat-rate traps
Some lenders quote a flat percentage on the original amount for the whole term — effectively simple interest applied up front. On a 5-year $20,000 loan quoted at 8% flat, the interest is $8,000 regardless of how fast you repay. Amortizing loans charge only on the falling balance, which is why an 8% amortizing loan costs far less than 8% flat. Ask which structure you are being quoted before comparing numbers.
FAQ
What is the difference from an amortizing loan?
Amortizing loans recalculate interest on the falling balance each month; simple interest fixes the charge on the original principal.
Where is simple interest common?
Short-term notes, some auto add-ons and flat-rate products; long-term loans almost always amortize.
Does simple interest compound?
No — that is the point. Compounding charges interest on interest; simple interest never does.
How do I quote a short term?
Use years as a fraction: 6 months = 0.5, 90 days ≈ 0.25.
Reviewed by the LoanMath editorial team