Calculate your estimated monthly loan payments with this easy-to-use tool.
Your Estimated Monthly Payment:
$0.00
Understanding Your Loan Payments
This calculator helps you estimate the fixed monthly payment for an amortizing loan. An amortizing loan is one where each payment includes both a portion of the principal (the amount borrowed) and a portion of the interest charged by the lender. Over time, as you make payments, the principal balance decreases, and a larger portion of each subsequent payment goes towards the principal.
The Math Behind the Calculation
The formula used to calculate the monthly payment (M) for an amortizing loan is derived from the standard annuity formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P = Principal loan amount (the total amount borrowed)
i = Monthly interest rate (annual interest rate divided by 12)
n = Total number of payments (loan term in years multiplied by 12)
How to Use the Calculator
Loan Amount: Enter the total amount you plan to borrow.
Annual Interest Rate: Enter the yearly interest rate as a percentage (e.g., 5.5 for 5.5%).
Loan Term: Enter the duration of the loan in years.
Click the "Calculate Monthly Payment" button.
Why This Matters
Knowing your estimated monthly payment is crucial for budgeting and financial planning. It allows you to:
Determine if a loan is affordable within your budget.
Compare different loan offers from various lenders.
Understand the total cost of borrowing over the life of the loan.
Make informed decisions about taking on new debt.
This calculator provides an estimate. Actual loan payments may vary slightly due to lender-specific fees, exact amortization schedules, or rounding differences.
function calculateLoanPayment() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTerm = parseFloat(document.getElementById("loanTerm").value);
var monthlyPaymentElement = document.getElementById("monthlyPayment");
if (isNaN(loanAmount) || loanAmount <= 0) {
monthlyPaymentElement.textContent = "Invalid Loan Amount";
monthlyPaymentElement.style.color = "red";
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
monthlyPaymentElement.textContent = "Invalid Interest Rate";
monthlyPaymentElement.style.color = "red";
return;
}
if (isNaN(loanTerm) || loanTerm <= 0) {
monthlyPaymentElement.textContent = "Invalid Loan Term";
monthlyPaymentElement.style.color = "red";
return;
}
// Convert annual interest rate to monthly interest rate
var monthlyInterestRate = (annualInterestRate / 100) / 12;
// Calculate the total number of payments
var numberOfPayments = loanTerm * 12;
var monthlyPayment = 0;
// Handle the case where interest rate is 0
if (monthlyInterestRate === 0) {
monthlyPayment = loanAmount / numberOfPayments;
} else {
// Calculate monthly payment using the loan payment formula
// M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
// Format the monthly payment to two decimal places and display
monthlyPaymentElement.textContent = "$" + monthlyPayment.toFixed(2);
monthlyPaymentElement.style.color = "#28a745"; // Success green
}