Simple Interest Loan Calculator
Calculate the total interest and repayment amount on a loan charged with simple interest, where interest is calculated only on the original principal.
Your results
Calculation breakdown
- Total interest
- principal × rate × years
- Instalment
- (principal + total interest) ÷ number of instalments
Worked example
A $10,000 loan at an 8% flat annual rate over 3 years accrues $2,400 in simple interest, giving a total repayable of $12,400, or about $344 a month over 36 monthly instalments.
Assumptions
- Simple interest is charged on the original principal only, not the reducing balance.
- Assumes equal instalments across the full term.
- Check whether your contract actually uses simple or reducing-balance interest before relying on this.
How this calculator works
Simple interest is calculated only on the original principal for the life of the loan, unlike compound interest which is charged on the growing balance. This calculator applies the simple interest formula to show the total interest, total repayable and an even instalment amount over the loan term.
Frequently asked questions
Where might I see a simple interest loan in Australia?
Some personal loans, short-term finance and certain consumer contracts use simple or flat-rate interest, though many mainstream loans use reducing-balance (compound) interest instead.
Is simple interest cheaper than compound interest?
It depends on the rate quoted. A flat rate applied to the full principal for the whole term can end up costing more than a similar-looking reducing-balance rate, so always compare the total dollar cost.
How is the instalment amount worked out here?
The total repayable, being principal plus total simple interest, is divided evenly across the number of instalments over the loan term.
Results are estimates only and are not financial, tax, legal or credit advice.