Kodigo Labs ToolsShow amortization schedule
How to use the loan calculator
Enter the loan amount, or switch to Price & down payment if you are buying a car or a house and only know the price. Then enter the interest rate and the term. The monthly amortization, total interest and the full schedule update as you type. Open Show amortization schedule to see how much of each payment goes to interest and how much reduces your balance.
The monthly payment uses the standard amortization formula: payment = P × r ÷ (1 − (1 + r)−n), where P is the amount financed, r is the annual rate ÷ 12, and n is the number of months. For a 0% loan, the payment is simply P ÷ n.
Worked example
Juan borrows ₱1,000,000 for a house at 6% per year for 20 years. The monthly rate is 6% ÷ 12 = 0.5%, and there are 240 payments. His monthly amortization is ₱1,000,000 × 0.005 ÷ (1 − 1.005−240) = ₱7,164.31. Over 20 years he pays ₱1,719,434 in total, so the total interest is about ₱719,434. In the first month, ₱5,000 of his payment is interest and only ₱2,164 goes to the principal; near the end almost all of it goes to the principal.
Add-on rate vs. diminishing balance
Many car loans, motorcycle loans, salary loans and personal loans in the Philippines quote an add-on rate, often per month. With an add-on rate, the interest is computed on the full original amount for the whole term:
- Total interest = loan amount × monthly add-on rate × number of months
- Monthly payment = (loan amount + total interest) ÷ number of months
Example: ₱100,000 at 1.5% add-on per month for 12 months has ₱18,000 interest, so you pay ₱118,000 ÷ 12 = ₱9,833.33 a month. Because you are paying down the loan every month but still paying interest on the original ₱100,000, the true cost is about 31.7% per year on a diminishing balance basis, not 18%. Choose Add-on rate in the calculator to see the equivalent annual rate, and use it to compare offers fairly. Under the Truth in Lending Act, lenders must give you a disclosure statement with the effective interest rate, so ask for it.
Tips before you sign
- A bigger down payment lowers both the monthly amortization and the total interest.
- A longer term lowers the monthly payment but increases the total interest a lot.
- Housing loan rates are often fixed only for 1, 3 or 5 years and then repriced. Check what happens after the fixed period.
- Ask if there is a penalty for paying early or making extra principal payments.
Frequently asked questions
What is monthly amortization?
It is the fixed amount you pay every month until the loan is fully paid. Each payment covers the interest for that month, and the rest goes to reducing your principal (the amount you still owe).
What is the difference between add-on rate and diminishing balance?
With an add-on rate, interest is computed on the original loan amount for the whole term, even though you are paying it down every month. With diminishing balance, interest is charged only on what you still owe. The same number looks much cheaper as an add-on rate: a 1.5% per month add-on rate (18% a year) is roughly 31–32% per year on a diminishing balance basis.
Are the preset rates the actual rates of banks?
No. The car, housing and personal loan buttons only fill in typical example values so you can see how the calculator works. Rates change often and depend on the bank, the term and your credit profile, so always use the rate in your bank’s official offer or disclosure statement.
Does the result include fees and insurance?
No. Banks may add processing fees, chattel mortgage fees, documentary stamp tax, mortgage redemption insurance, fire insurance or car insurance. These can add a few percent to your real cost, so ask for the full disclosure statement before signing.
Is my information sent anywhere?
No. All computations happen in your browser. Nothing you type is sent to us, to a bank or to anyone else.