Loan Calculator
Calculate monthly payments, total interest costs, and view amortization schedules for any loan type.
Loan Calculator
Loan Summary
Understanding Loan Calculations
A loan calculator helps you determine the financial implications of taking out a loan. It calculates your monthly payment, total interest paid over the life of the loan, and provides a breakdown of payments through an amortization schedule.
Key Components of a Loan
Principal
The initial amount borrowed, before interest is applied.
Interest Rate
The annual percentage rate (APR) charged by the lender for borrowing the money.
Loan Term
The length of time to repay the loan, usually expressed in months or years.
Monthly Payment
The amount paid each month, including both principal and interest.
Amortization
The process of paying off a loan with regular payments, where each payment is applied to both principal and interest.
Total Interest
The total amount paid in interest over the life of the loan.
How to Use This Calculator
- Enter the loan amount you wish to borrow
- Input the annual interest rate (as a percentage)
- Specify the loan term in months
- View your monthly payment and other loan details immediately
- Click "Show Amortization Schedule" to see a detailed payment breakdown
Loan Payment Formula
The monthly payment for a loan is calculated using the following formula:
Where:
- P = Principal (loan amount)
- r = Monthly interest rate (annual rate divided by 12 and by 100)
- n = Total number of payments (loan term in months)
Tips for Managing Loans
- Making extra payments toward the principal can significantly reduce the total interest paid and shorten the loan term.
- Consider refinancing if interest rates drop significantly below your current rate.
- Understand the difference between fixed-rate and variable-rate loans.
- Be aware of prepayment penalties before making extra payments.
- Maintain a good credit score to qualify for better interest rates on future loans.
Important Note:
This calculator provides estimates only. Actual loan terms and payments may vary based on your credit history, the specific lender, and other factors. Always review the final terms with your lender before signing any loan agreement.