Loan Calculator

Modify the values and click the Calculate button to use

Result

$477.00
(Monthly Payment)
$477
Monthly Payment
Total Payment
$28,620.00
Total Interest
$3,620.00
Payoff Date
June 2029
Interest Rate
5.5%

Payment Breakdown

Payment Type Amount Percentage
Principal $416.67 87.3%
Interest $60.33 12.7%

Amortization Schedule

Payment # Payment Date Payment Amount Principal Interest Remaining Balance

Loan Calculator Introduction

The Loan Calculator helps you estimate your monthly payments, total interest, and total payment amount for a loan. It also provides a detailed amortization schedule showing how each payment is applied to principal and interest over time.

Understanding Loan Payments

When you take out a loan, each payment consists of two parts: principal (the original loan amount) and interest (the cost of borrowing money). In the early stages of a loan, most of your payment goes toward interest. As you continue making payments, more of each payment goes toward reducing the principal.

Why Use a Loan Calculator?

A loan calculator helps you:

  • Understand the true cost of borrowing
  • Compare different loan offers
  • Plan your budget by knowing your exact monthly payment
  • See how extra payments can reduce your loan term and total interest

Common Loan Types

Loan Type Typical Interest Rate Typical Term Common Uses
Mortgage 3-6% 15-30 years Home purchase
Auto Loan 3-10% 3-7 years Vehicle purchase
Personal Loan 6-36% 1-7 years Various personal expenses
Student Loan 3-12% 10-25 years Education expenses

Calculation Methods

This calculator uses the standard formula for fixed-rate loans:

Monthly Payment Formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n - 1 ]

Where:

  • M = Monthly payment
  • P = Principal loan amount
  • i = Monthly interest rate (annual rate divided by 12)
  • n = Total number of payments (loan term in months)

Financial Implications

Understanding the full cost of a loan is crucial for financial planning. The interest rate and loan term significantly impact your total repayment amount.

Tips for Lowering Loan Costs

  • Make a larger down payment to reduce the principal
  • Choose a shorter loan term when possible
  • Make extra payments when you can
  • Shop around for the best interest rate
  • Consider refinancing if rates drop significantly

Factors That Affect Loan Approval

  • Credit score and credit history
  • Income and employment stability
  • Debt-to-income ratio
  • Collateral (for secured loans)
  • Loan-to-value ratio

Limitations of Loan Calculators

While loan calculators provide accurate estimates based on the information provided, they don't account for potential changes in interest rates (for variable-rate loans), fees, insurance, or taxes that might be included in actual loan payments. Always consult with a financial advisor or lender for precise figures.