What Is 7% Interest on a $100,000 Loan? (Per Month & Per Year)
The short answer depends on how the interest is calculated and how you repay the loan.
With simple interest, you’re looking at a flat yearly charge on the balance.
With a standard amortized loan (most auto, personal, and mortgage loans),
your monthly payment is fixed but the mix of principal and interest changes over time—so your
actual monthly cost and total interest depend on the term.
Below, you’ll find ready-made numbers for common terms (5–30 years), quick examples,
and a free calculator to test any loan length, extra monthly payments, or one-time lump sums.
If you’ve been wondering exactly how much 7% costs on $100,000, this guide gives you the
per-month and per-year numbers—plus how to pay less interest over the life of the loan.
Quick Answer: 7% Interest on $100,000
💡 Simple interest: 7% of $100,000 = $7,000 per year, or about $583.33 per month.
This doesn’t include any principal reduction — it’s a flat interest charge.
💰 Amortized loan: When you repay the loan over time, your monthly payment covers both principal and interest.
Here’s what 7% looks like for common loan terms:
- 5 years: ≈ $1,980/mo, total interest ≈ $18,800
- 10 years: ≈ $1,160/mo, total interest ≈ $39,200
- 15 years: ≈ $900/mo, total interest ≈ $62,000
- 30 years: ≈ $665/mo, total interest ≈ $139,500
These are rough estimates for standard amortized loans. We’ll break down the exact math and show
how small changes—like biweekly payments or one-time lump sums—can save you thousands.
How 7% Is Calculated: Simple vs. Amortized Loans
Not all 7% loans are created equal. The way your interest is calculated dramatically changes how much you’ll pay in the long run.
Let’s look at the two main methods lenders use to apply a 7% rate.
💡 Simple Interest
Simple interest is calculated using a straightforward formula:
Interest = Principal × Rate × Time
For a $100,000 loan at 7%, that’s $7,000 per year. This approach doesn’t account for principal reduction,
so you pay the same interest each year until the balance is paid off.
💰 Amortized Loan
Most consumer loans—like auto loans, personal loans, and mortgages—are amortized.
You make a fixed monthly payment that includes both interest and principal. The payment amount is calculated using the PMT formula:
PMT = [r × P] / [1 - (1 + r)-n]
where r is the monthly rate (7% ÷ 12) and n is the total number of payments.
👉 In short: simple interest applies a flat rate, while an amortized loan gradually reduces your balance—
meaning you pay less interest over time as your principal shrinks.
Monthly Payments at 7% for $100,000
Estimates below assume a standard amortized loan with a fixed 7% APR and no extra payments.
| Term | Monthly Payment | Total Interest | Total Paid |
|---|---|---|---|
| 5 years | $1,980/mo | $18,807 | $118,807 |
| 10 years | $1,161/mo | $39,330 | $139,330 |
| 15 years | $899/mo | $61,789 | $161,789 |
| 20 years | $775/mo | $86,072 | $186,072 |
| 25 years | $707/mo | $112,034 | $212,034 |
| 30 years | $665/mo | $139,509 | $239,509 |
Shorter terms mean higher monthly payments but far less total interest. Longer terms lower the payment but increase the overall cost.
Yearly & Monthly Interest (Simple Interest View)
For a quick snapshot, here’s how 7% interest on a $100,000 loan looks under a simple interest calculation —
without factoring in any principal payments.
- Annual interest: $100,000 × 7% = $7,000 per year
- Monthly equivalent: $7,000 ÷ 12 = $583.33 per month
⚠️ Keep in mind: this simple view doesn’t reflect how amortized loans actually work —
where your principal decreases over time and interest charges shrink with each payment.
Still, it’s a helpful way to compare rates and get a basic sense of borrowing cost.
Factors That Change Your Payment
Even with the same 7% interest rate, your monthly payment and total cost can vary based on several key factors.
Understanding these helps you take control of what you owe and find ways to pay less overall.
- Loan term: Shorter loans mean higher monthly payments but less total interest.
- Compounding method: How often your interest is calculated (monthly, daily, or annually) changes the total you pay.
- Extra payments: Applying additional money toward the principal each month reduces interest faster.
- Lump-sum payment: Making one big payment mid-loan can cut years off your schedule.
- Fees & charges: Origination fees, insurance, or prepayment penalties can slightly raise the total cost.
- Credit score: A higher score may qualify you for a lower APR — which means less paid in interest.
💡 Smart tip: Paying even one or two extra installments per year — or switching to biweekly payments —
can save you thousands in interest and shorten your loan by several months or even years.
Examples You Can Copy (Scenarios)
Let’s see how a few small changes can make a big difference in your total interest and payoff time — all at the same 7% rate.
💡 Case A — Extra $100 per Month (10-Year Loan)
On a $100,000 loan over 10 years at 7%, your normal payment is about $1,161/month.
Adding an extra $100 monthly trims roughly 1 year off the term
and saves around $4,500 in total interest.
💰 Case B — One-Time Lump Sum ($5,000 after Year 1)
Making a single $5,000 payment toward the principal after the first year can shorten your payoff by
8–10 months and reduce total interest by roughly $3,000.
🏠 Case C — 15 Years vs. 30 Years
A 15-year term costs about $899/month and totals $161,800 paid.
A 30-year term lowers the payment to $665/month but raises total cost to
$239,500 — that’s nearly $78,000 more in interest just for stretching the term.
Small adjustments — like one extra payment or a mid-loan lump sum — can dramatically reduce your costs.
Try plugging these same examples into our calculator below to see how much you could save with your own numbers.
Try It Yourself
Want to see your own numbers? Use our free Loan Interest Calculator to estimate your monthly payment,
total interest, and full amortization schedule — with support for extra or lump-sum payments.
It’s the easiest way to test different terms, compare interest costs, and plan how to pay off your loan faster.
FAQs — 7% Interest on a $100,000 Loan
1. How much is 7% interest on $100k per year?
At 7%, a $100,000 loan accrues $7,000 in interest per year if calculated using simple interest.
Divide by 12 for about $583.33 per month.
2. What is the monthly payment on $100k at 7% for 30 years?
A 30-year loan at 7% has a payment of roughly $665 per month,
with total interest around $139,500 over the life of the loan.
3. Is 7% a good rate for a personal, auto, or mortgage loan?
For 2025, 7% is slightly above average for top-tier borrowers but typical for personal loans.
Auto and mortgage rates vary — good credit or shorter terms can bring it down a bit.
4. How do extra payments change what I pay at 7%?
Even small extra payments go straight to the principal, reducing future interest.
For example, $100 extra per month on a 10-year loan can save you $4,000–$5,000 and cut nearly a year off your term.
5. Is simple interest the same as APR or APY?
Not exactly. APR includes fees and compounding effects for loans,
while APY shows the annual yield for savings.
Simple interest is just the base rate, without compounding or fees.
6. Does credit score change the rate from 7%?
Yes — lenders adjust interest based on credit profile.
Higher scores (750+) may qualify for rates closer to 6% or lower, while lower scores may pay 9–12% or more.
Conclusion & Next Steps
A 7% rate on a $100,000 loan equals $7,000 per year under simple interest —
but in real-world amortized loans, your term length changes everything.
Shorter terms raise your monthly payment but save thousands in total interest.
To understand your exact costs and test different strategies, try our interactive calculators below.
🔗 Official Resource:
CFPB – Loan Cost Basics
Taking time to compare rates, shorten your term, or add small extra payments can make the difference between paying interest — and beating it.
