This calculator helps you estimate the fixed monthly payment required to repay a loan. It's a crucial tool for budgeting and understanding the true cost of borrowing, whether for a car, personal expenses, or other significant purchases. The calculation is based on a standard loan amortization formula.
The Math Behind the Calculation
The formula used to calculate the monthly loan payment (M) is derived from the annuity formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly loan payment.
P = The principal loan amount (the total amount you borrow).
i = Your monthly interest rate. This is calculated by dividing the annual interest rate by 12 (i = Annual Interest Rate / 12 / 100).
n = The total number of payments over the loan's lifetime (this is the loan term in months).
How to Use This Calculator
Loan Amount: Enter the total sum of money you need to borrow.
Annual Interest Rate: Input the yearly interest rate as a percentage (e.g., 5.5 for 5.5%).
Loan Term (Months): Specify the total number of months you have to repay the loan.
Click "Calculate Monthly Payment" to see your estimated payment.
Why This Calculation Matters
Knowing your estimated monthly payment allows you to:
Budget Effectively: Ensure the loan payment fits comfortably within your monthly expenses.
Compare Loan Offers: Evaluate different loan options from various lenders based on their rates and terms.
Understand Total Cost: While this calculator shows the monthly payment, remember that the total amount repaid will be significantly higher than the principal due to interest over time.
Plan for Future Expenses: Make informed decisions about taking on new debt.
This tool provides an estimate and does not account for potential fees, insurance, or other charges that might be included in your loan agreement. Always review your loan documents carefully.
function calculatePayment() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermMonths = parseInt(document.getElementById("loanTermMonths").value, 10);
var errorMessageDiv = document.getElementById("error-message");
errorMessageDiv.style.display = "none"; // Hide error message initially
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0) {
errorMessageDiv.textContent = "Please enter a valid loan amount greater than zero.";
errorMessageDiv.style.display = "block";
return;
}
if (isNaN(annualInterestRate) || annualInterestRate < 0) {
errorMessageDiv.textContent = "Please enter a valid annual interest rate (cannot be negative).";
errorMessageDiv.style.display = "block";
return;
}
if (isNaN(loanTermMonths) || loanTermMonths 0) {
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, loanTermMonths)) / (Math.pow(1 + monthlyInterestRate, loanTermMonths) – 1);
} else {
// Handle case where interest rate is 0%
monthlyPayment = loanAmount / loanTermMonths;
}
var resultValueSpan = document.getElementById("result-value");
resultValueSpan.textContent = "$" + monthlyPayment.toFixed(2);
}