Loan Calculator
Modify the values and click the Calculate button to use
Result
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 |
---|
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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:
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.