This calculator helps you estimate your monthly loan payments, the total interest you'll pay over the life of the loan, and the total amount repaid. Understanding these figures is crucial when considering any form of borrowing, whether it's a mortgage, car loan, personal loan, or student loan.
How the Calculation Works
The core of this calculator uses the standard formula for calculating the monthly payment (M) of an amortizing loan:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P = Principal loan amount
i = Monthly interest rate (Annual interest rate / 12)
n = Total number of payments (Loan term in years * 12)
Key Terms Explained:
Loan Amount (Principal): The total sum of money borrowed.
Annual Interest Rate: The yearly rate charged by the lender, expressed as a percentage. This calculator converts it to a monthly rate for the calculation.
Loan Term (Years): The duration over which the loan is to be repaid. This is converted into the total number of monthly payments.
Monthly Payment: The fixed amount you pay each month to cover both principal and interest.
Total Interest Paid: The sum of all interest payments made over the entire loan term. This is calculated as (Total Amount Paid – Loan Amount).
Total Amount Paid: The sum of all monthly payments made over the loan term. This is calculated as (Monthly Payment * Total Number of Payments).
Why Use This Calculator?
Budgeting: Estimate how much a loan will impact your monthly budget.
Comparison Shopping: Compare loan offers from different lenders. A seemingly small difference in interest rate can result in significant savings over time.
Loan Structuring: Understand how changing the loan term or the amount you borrow affects your payments and total interest. Shorter terms usually mean higher monthly payments but less total interest paid.
Financial Planning: Plan for long-term financial commitments like homeownership or vehicle purchases.
For example, a $200,000 loan at 5% annual interest over 30 years results in a monthly payment of approximately $1,073.64. Over 30 years, you would pay about $186,510.40 in interest, with a total repayment of $386,510.40.
function calculateLoan() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var resultDiv = document.getElementById("result");
var monthlyPaymentDisplay = document.getElementById("monthlyPaymentDisplay");
var totalInterestDisplay = document.getElementById("totalInterestDisplay");
var totalAmountPaidDisplay = document.getElementById("totalAmountPaidDisplay");
if (isNaN(loanAmount) || loanAmount <= 0 ||
isNaN(annualInterestRate) || annualInterestRate < 0 ||
isNaN(loanTermYears) || loanTermYears <= 0) {
monthlyPaymentDisplay.textContent = "Invalid input";
totalInterestDisplay.textContent = "Invalid input";
totalAmountPaidDisplay.textContent = "Invalid input";
resultDiv.style.backgroundColor = "#f8d7da"; // Light red for error
resultDiv.style.color = "#721c24";
resultDiv.style.borderColor = "#f5c6cb";
return;
}
var monthlyInterestRate = annualInterestRate / 100 / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPayment = 0;
var totalInterestPaid = 0;
var totalAmountPaid = 0;
if (monthlyInterestRate === 0) {
// Handle 0% interest rate
monthlyPayment = loanAmount / numberOfPayments;
totalInterestPaid = 0;
totalAmountPaid = loanAmount;
} else {
// Standard amortization formula
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
totalAmountPaid = monthlyPayment * numberOfPayments;
totalInterestPaid = totalAmountPaid – loanAmount;
}
// Format currency and display results
monthlyPaymentDisplay.textContent = "$" + monthlyPayment.toFixed(2);
totalInterestDisplay.textContent = "$" + totalInterestPaid.toFixed(2);
totalAmountPaidDisplay.textContent = "$" + totalAmountPaid.toFixed(2);
// Reset to success styling
resultDiv.style.backgroundColor = "#d4edda";
resultDiv.style.color = "#155724";
resultDiv.style.borderColor = "#c3e6cb";
}