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How to Calculate Your Total Loan Repayment
Before you accept a loan, one number tells you more than any advertised rate: the total amount you will repay. It shows what the loan really costs, lets you check whether the payments fit your budget, and gives you a fair way to compare offers. You do not need advanced math. This page shows what goes into total repayment, the formulas for the two most common ways interest is charged, two worked examples, and a free calculator you can use with your own numbers. It is part of our loan repayment guide for the Philippines.
What Goes Into Total Repayment
Total repayment is every peso you pay from the first due date to the last: the principal you borrowed, the interest, and any fees added to your repayment. Fees deducted before you receive the money do not always raise your total repayment, but they lower your net proceeds, the cash you actually receive. To see the real cost, compare the two: Total cost of borrowing = Total repayment − Net proceeds. Late payment penalties are not included because they depend on whether you pay on time; see late payment fees and consequences.
The Basic Formulas
Add-on (flat) interest, charged on the original amount for the whole term: Interest = Loan amount × Rate per period × Number of periods. Total repayment = Loan amount + Interest (+ fees added to repayment). Payment per period = Total repayment ÷ Number of periods.
Diminishing balance, charged on what you still owe: Payment per period = P × r ÷ (1 − (1 + r)^−n), where P is the loan amount, r is the rate per period as a decimal (3% = 0.03) and n is the number of payments. Total repayment = Payment × n. Net proceeds = Loan amount − Fees deducted upfront.
The two methods give very different costs at the same quoted rate, which is why the effective interest rate is useful: it turns interest, fees and timing into one comparable figure.
Worked Example 1: Add-On Interest
All figures are hypothetical and for illustration only. You borrow ₱12,000 for 6 months at 2.5% per month on the original amount, no fees. Interest = ₱12,000 × 0.025 × 6 = ₱1,800. Total repayment = ₱13,800. Monthly payment = ₱2,300. On the diminishing balance at the same 2.5% per month, the monthly payment is about ₱2,178.60, total repayment about ₱13,071.60 and total interest about ₱1,071.60. Same quoted rate, but the add-on loan costs about ₱728 more. Our rough estimate of the effective monthly rate is about 4.1% for the add-on loan versus 2.5% for the diminishing balance loan.
Worked Example 2: Fees Deducted Upfront
You borrow ₱15,000 for 5 months at 2% per month on the original amount, and the lender deducts a 4% fee (₱600) before release. Interest = ₱15,000 × 0.02 × 5 = ₱1,500. Total repayment = ₱16,500. Monthly payment = ₱3,300. Net proceeds = ₱14,400. Total cost = ₱16,500 − ₱14,400 = ₱2,100, about 14.6% of the cash you received. Our estimate of the effective monthly rate is about 4.7%, higher than the quoted 2%, because of the upfront fee.
Free Loan Repayment Calculator Tool: Calculate Your Total Repayment
This calculator tool lets you calculate your net proceeds, total repayment, payment per period and approximate effective rate. Enter your own numbers below and press Calculate. The calculator runs in your browser; nothing you enter is saved or sent anywhere. It gives an estimate for illustration only and does not replace the disclosure statement or repayment schedule from your lender. Results may differ from the lender's figures because of rounding, payment dates and how the lender counts days.
Using the Result Wisely
- Check that the payment per period fits your budget with room to spare.
- Compare total cost across offers with the same amount and term.
- Ask the lender to confirm net proceeds, total repayment and effective interest rate in writing.
- Walk away if the lender's figures are far from yours and it cannot explain why.
When you are ready to compare real options, start with our list of low interest loan apps for Filipinos and run each offer through the calculator. For payment channels and schedules, see how loan repayment works.
FAQs
Is the calculator result the same as the lender's figure?
Not necessarily. The calculator estimates from the numbers you enter. The lender's disclosure statement is the document that applies to your loan. Differences can come from rounding, payment dates, fee treatment and day-count conventions.
Why is my total repayment higher than expected?
Common reasons are interest charged on the original amount rather than the balance, fees added to the repayment, a longer term than you assumed, or late payment charges. Compare each line of the lender's schedule with your calculation.
Does the calculator include late fees?
No. Late fees depend on whether you miss a due date, so they are not part of the estimate. Check your agreement for penalty terms, and read about late payment fees and consequences.
How do I convert a monthly rate to an annual rate?
A quick estimate is to multiply the monthly rate by 12: 3% per month is about 36% per year. If interest compounds, the yearly figure is higher: (1 + 0.03)^12 − 1 is about 42.6%. Neither includes fees, so for the true cost look at the effective interest rate.
Written and maintained by Marissa Dela Cruz, Editor
Marissa researches and maintains every guide on Loan Low Interest, from loan costs and the effective interest rate to eligibility, repayment and borrower safety. She works from primary sources: Philippine laws such as the Truth in Lending Act and the Data Privacy Act, circulars and guidance from the SEC and the BSP, and each provider's own published terms and disclosure statements.
Loan costs and disclosure rulesEligibility and requirementsRepayment and late feesLender verification and safety
Every page follows our editorial policy and is rechecked when rules or terms change. See her full profile and guides.
For information only. This page is not financial or legal advice. Rules, rates and procedures change, so confirm current details with the lender and the relevant government agency.