Calculators & everyday math
How the Loan Term Affects Total Interest
Stretching a loan over more months makes each payment smaller, but the balance stays outstanding for longer, so more interest builds up. This guide puts numbers on that trade-off for a car loan and a mortgage.
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A $30,000 loan at 7% over different terms
| Term | Monthly payment | Total interest |
|---|---|---|
| 36 months | $926.31 | $3,347.26 |
| 48 months | $718.39 | $4,482.59 |
| 60 months | $594.04 | $5,642.16 |
| 72 months | $511.47 | $6,825.85 |
| 84 months | $452.78 | $8,033.55 |
Going from 36 to 72 months cuts the payment by $414.84 but more than doubles the interest.
A $300,000 mortgage at 6.5%
Doubling the term lowers the payment by about 27%, not 50%, because interest keeps accruing on a balance that shrinks more slowly.
| Term | Monthly payment | Total interest |
|---|---|---|
| 15 years | $2,613.32 | $170,397.98 |
| 30 years | $1,896.20 | $382,633.47 |
Why a longer term costs more interest
Interest is charged each month on the balance still owed. A longer term means a smaller part of each payment goes to principal early on, so the balance — and the interest on it — stays higher for longer.
Things the comparison leaves out
- Lenders often offer different rates for different terms; compare each term at its own quoted rate.
- Fees, taxes, and insurance are not part of these figures.
- At 0% interest the term doesn’t change the total: you repay exactly what you borrowed.
Loan Term and Interest FAQ
- Does doubling the term halve the payment?
- No, unless the rate is 0%. With interest, the payment falls by less than half because more interest builds up over the longer term.
- Is a shorter term always less total interest?
- At the same rate, yes. If the shorter term comes with a different rate, compare the two with their own rates.
- How much more interest does a 72-month car loan cost than a 36-month one?
- For $30,000 at 7%, $6,825.85 versus $3,347.26 — about $3,478.59 more.
- Why does a 30-year mortgage cost so much more interest?
- The balance falls slowly for many years, and interest is charged on it every month.
- Can I compare terms in months as well as years?
- Yes. The Loan Payment Calculator accepts the term in years or months.
Related guides
- How Loan Payments WorkThe fixed-payment formula behind installment loans, each variable explained, a step-by-step worked example, and the 0% interest case.
- Principal vs. InterestHow each fixed loan payment splits into interest and principal, an amortization example, and why the split shifts over the life of a loan.
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