See What a Change of Term Actually Costs You

Payment Estimator

What This Calculator Is Doing

The tool above applies the standard amortisation formula used for fixed-rate instalment loans. It takes the amount you enter, the annual percentage rate, and the number of months, and returns the level monthly payment that retires the balance exactly at the end of the term — along with the total you will repay and the interest component of that total.

Three notes on interpretation. The rate you enter is a rate you choose for modelling; it is not a quote and we cannot tell you what any partner will offer. Origination fees are not modelled, so where a fee applies the true annual percentage rate will be higher than the rate you entered. And the result assumes every payment lands on schedule — late payments add fees and interest, and the tool does not attempt to predict them.

Used properly, the Kapitus calculator answers two questions before you submit anything. First, whether a given amount produces a payment your budget can genuinely absorb. Second, what a change of term costs you in total dollars. That second question is the one most borrowers never ask, and it is usually worth more money than shopping for a slightly better rate.

Why the Early Payments Feel Like They Do Nothing

On a fixed instalment loan, every payment is the same size but its composition changes every month. Interest is charged on the outstanding balance, so at the start — when the balance is at its largest — the interest portion is at its largest and the principal portion at its smallest. As the balance falls, the interest charge falls with it, and the share of each identical payment that goes to principal rises.

This structure has one practical implication worth acting on. Extra payments made early reduce the balance that all subsequent interest is calculated on, so an additional $100 paid in month two saves considerably more than the same $100 paid in month twenty. If you expect a tax refund or a bonus, applying it early is materially more valuable than applying it late.

Before making extra payments, confirm two things with your Kapitus Funding lending partner: that no prepayment charge applies, and that additional amounts are applied to principal rather than held as a prepaid future instalment. The second is the more common trap, and it neutralises the benefit entirely.

What Changing the Term Actually Costs

The single most consequential input on this calculator is the term, and it is the one borrowers adjust most casually. The table below holds the amount and rate constant and moves only the number of months.

Reading across, the thirty-six month schedule costs $767 more than the twelve-month one on the same $3,000 at the same rate. It also has a payment $165 smaller each month, which for some households is the difference between manageable and not. Neither row is objectively correct. What is objectively wrong is choosing the longest term because the monthly number looked comfortable, without ever seeing the right-hand column.

Testing Affordability Properly

A payment that fits on paper and a payment that fits in life are different things. Working through the following produces a figure you can trust.

1. Start with net income, not gross. Use what actually lands in your account.
2. Subtract every fixed obligation. Housing, utilities, insurance, transport, existing debt payments, phone, childcare, subscriptions.
3. Subtract realistic food and fuel. Check three months of actual statements rather than estimating; almost everyone underestimates both.
4. Subtract an irregular allowance. Something breaks, someone gets sick, a birthday happens. A hundred dollars a month is conservative for most households.
5. Take what remains and halve it. That figure is a sustainable maximum payment. Using the whole remainder leaves no margin, and no margin is how missed payments start.

Run the Kapitus Funding calculator against that halved figure rather than against the largest payment you could theoretically make. If the resulting amount is less than you wanted to borrow, that is useful information arriving at the right time.

Debt-to-Income and Why Your Own Test Is Stricter

Lenders assess affordability using debt-to-income ratio: total monthly debt obligations divided by gross monthly income. Most consumer lenders begin tightening well before this reaches half, and prime lenders considerably earlier.

Notice what that calculation leaves out. It uses gross income rather than take-home pay, and it counts only debt obligations — not rent in every case, not food, not childcare, not the cost of actually living. A ratio that passes an underwriting screen can still describe a household with nothing left over.

That is why the five-step test above is stricter than the lender's. The lender is assessing the probability that you will repay. You are assessing whether repaying will be survivable. Those are related questions, but they are not the same one, and only one of them is your problem.

Costs the Calculator Does Not Show

• Origination fees. Where charged, these are typically deducted from the amount disbursed. Request $2,000 with a five percent fee and roughly $1,900 arrives while you repay interest on $2,000. Adjust the requested amount upward if you need a specific figure to land.
• Late fees. Set out in the agreement, and they compound the problem by adding to the balance that interest accrues on.
• Returned payment fees. Charged by the lender and frequently by your bank as well, so a single failed payment can cost twice.
• Autopay rate conditions. Some offers advertise a reduced rate contingent on maintaining automatic payment. Cancelling autopay can raise the rate on the remaining balance.
• Optional insurance products. Where offered alongside a loan, these are optional by law. Evaluate them on whether you want the cover, not as part of the loan package.

None of these appear in an amortisation formula, and all of them appear in the agreement. Read the disclosure block, then read the fee schedule. Between them they contain everything the Kapitus calculator cannot tell you.

Two Offers, Worked Through Properly

The situation the Kapitus calculator is built for is comparing offers that are not directly comparable because more than one variable differs. Here is that comparison done in full.

Offer B has the lower advertised rate and the smaller monthly payment. It is also $290 more expensive and delivers $140 less into your account. A borrower comparing on rate picks B. A borrower comparing on monthly payment picks B. A borrower comparing on total repaid picks A — unless the $52 monthly difference genuinely matters to their cash flow, in which case B is a defensible choice made with the numbers visible rather than hidden.

That is the whole argument for using a calculator before accepting anything. It takes two minutes and it routinely changes which offer a borrower takes.

Why Your Lender's Figure May Differ Slightly

If the payment quoted in your agreement differs from the Kapitus calculator by a small amount, that is normal and does not indicate an error. Several conventions vary between lenders.

• Day-count convention. Some lenders calculate interest on actual days elapsed rather than assuming equal months, which shifts figures marginally.
• Rounding of the payment. Payments are usually rounded to the cent, and the final instalment absorbs the difference — often making it slightly larger or smaller than the rest.
• First payment date. A longer gap between funding and the first payment means more interest accrues before repayment begins.
• Fees financed rather than deducted. Where a fee is added to the balance instead of taken from the disbursement, the amount financed rises and so does the payment.

Differences of a few dollars are conventions. Differences of tens of dollars mean the terms are not what you thought they were, and that is worth a phone call before signing anything.

What an Extra Payment Is Actually Worth

Because interest accrues on the outstanding balance, an additional payment does two things at once: it removes principal, and it removes all the interest that principal would have generated for the rest of the term. That second effect is why timing matters so much.

The same $500 is worth roughly seven times more in month two than in month eighteen. If a tax refund, a bonus or a windfall is coming, applying it early is materially better than holding it — provided you are not stripping your cash buffer to do so, because a loan repaid early and an emergency put back on a credit card is a net loss.

A smaller and more sustainable version of the same idea is rounding the payment up. A $155.36 payment rounded to $200 puts nearly $45 a month against principal beyond the schedule, and on a two-year loan that typically removes several months from the term. Set it up as a standing amount rather than a monthly decision, because monthly decisions erode.

Two things to confirm before doing any of this: that no prepayment charge applies, and that extra amounts are applied to principal rather than held as a prepaid future instalment. The second is the more common trap and it eliminates the benefit entirely.

One final caution on ordering. Where you hold several debts, an extra payment is worth most against the highest-rate balance rather than against whichever loan feels most pressing. Run the figures for each before deciding where the money goes; the difference over a year is often larger than people expect.

Why This Tool Does Not Ask Who You Are

Payment calculators on lending sites frequently require an email address before showing a result. The Kapitus calculator does not, collects nothing, and runs entirely in your browser — the figures you enter never leave the device.

That choice reflects what the tool is for. Modelling a payment is a step people should take before deciding whether to borrow at all, and putting a form in front of it converts a research task into a lead capture. A Kapitus funding request is a separate decision that lives on its own page, and the arithmetic here is useful whether or not you ever make one.

The one thing this tool cannot model is your actual offer. Origination fees, day-count conventions and first-payment timing all vary between Kapitus lending Kapitus partners, so treat the output as a planning figure and the Kapitus partner's written disclosure as the authority.

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