Not Financial Advice. This calculator is for educational purposes only. Results are estimates and do not constitute professional financial, legal, or tax advice. Consult a certified financial professional before making decisions. Full disclaimer →
How much life does
your loan cost?
Adjust the sliders below to see your loan's true cost — measured in hours of your life.
You'll work 1mo 3d 2h just to pay interest. That's 5.1 work weeks of your life — gone.
What is the true cost of a loan?
When you take out a loan, the sticker price is just the beginning. The true cost includes every dollar of interest you pay over the life of the loan. For example, a $25,000 personal loan at 7.5% interest over 5 years doesn't just cost you $25,000 — it costs you over $30,000 when you add up all the payments. That extra $5,000+ goes straight to the bank as profit for lending you money.
But there's an even more important way to measure the cost of a loan: in hours of your life. If you earn $25 per hour, that $5,000 in interest represents over 200 hours of work — or roughly 26 full working days. That's nearly a month of your life spent working exclusively to pay the bank's profit. Our Loan Life Cost Calculator makes this invisible cost visible.
How does the Loan Life Cost Calculator work?
The calculator uses standard amortisation formulas to compute your monthly payment, total interest, and the complete repayment schedule. It then takes your hourly wage and converts every financial figure into hours of work. The amortisation schedule shows how each year's payments are split between principal (building your equity) and interest (paying the bank). In the early years of a loan, most of your payment goes to interest — which means the bank benefits before you do.
How to reduce the cost of your loan
There are several strategies to minimise how much interest you pay. First, choose the shortest loan term you can afford — a 3-year loan costs significantly less in interest than a 5-year loan, even if the monthly payments are higher. Second, make extra payments when possible — even an extra $50 per month can shave months off your repayment and save hundreds in interest. Third, shop around for the lowest interest rate — even a 1% difference in rate can save thousands over the life of a loan. Finally, consider whether you truly need the loan at all. Our calculator helps you see the full picture so you can make informed decisions.
Frequently Asked Questions
What is an amortisation schedule?
An amortisation schedule is a table showing each payment over the life of a loan, broken down into principal and interest components. Early payments are mostly interest, while later payments are mostly principal. Our calculator generates this schedule automatically and visualises it so you can see exactly when the balance tips in your favour.
How does the interest rate affect total cost?
The interest rate has an enormous impact on total cost, especially over longer terms. On a $25,000 loan over 5 years, the difference between 5% and 10% interest is roughly $3,500 in extra payments. Over 30 years (like a mortgage), even a 0.5% difference can mean tens of thousands of dollars. Always compare rates from multiple lenders before committing.
Why measure loan cost in hours?
Dollars are abstract — most people can't intuitively feel the weight of $5,000 in interest. But everyone understands what it means to work for 200 hours. Converting loan costs to time makes the true impact real and personal, helping you make better financial decisions.
Is this calculator accurate?
Our calculator uses standard fixed-rate amortisation formulas used by banks and financial institutions. The results are accurate for fixed-rate loans. Variable-rate loans, loans with fees, or loans with special terms may differ slightly. Always confirm final numbers with your lender. This tool is for educational purposes only and does not constitute financial advice.
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