Personal Loan Calculator
Calculate your estimated monthly payments and total repayment for a personal loan.
Loan Summary
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Understanding Your Personal Loan Amortization
A personal loan is a type of installment loan that can be used for various personal expenses, such as debt consolidation, home improvements, medical bills, or major purchases. Unlike secured loans, personal loans are typically unsecured, meaning they don't require collateral. This makes them more accessible but can sometimes mean higher interest rates.
Understanding how your loan is paid off over time is crucial. This is where an amortization schedule comes in. An amortization schedule breaks down each loan payment into principal and interest components, showing how your loan balance decreases with each payment.
How the Personal Loan Calculator Works
Our Personal Loan Calculator uses standard financial formulas to estimate your loan payments. Here's a breakdown of the calculations:
1. Monthly Interest Rate:
The annual interest rate is first converted into a monthly interest rate.
Monthly Interest Rate = Annual Interest Rate / 12 / 100
(We divide by 100 to convert the percentage to a decimal.)
2. Monthly Payment Calculation:
The calculator then computes the fixed monthly payment using the standard annuity formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M= Monthly PaymentP= Principal Loan Amount (e.g., $10,000)i= Monthly Interest Rate (e.g., 0.075 / 12)n= Total Number of Payments (Loan Term in Months)
3. Total Repayment and Total Interest:
Once the monthly payment is determined, the total repayment and total interest are calculated:
Total Repayment = Monthly Payment × Number of Months
Total Interest Paid = Total Repayment - Principal Loan Amount
4. Amortization Schedule:
The amortization table shows the breakdown for each month:
- Month: The payment number.
- Starting Balance: The amount owed at the beginning of the month.
- Monthly Payment: The fixed amount paid each month (same for all months).
- Interest Paid: The portion of the monthly payment that covers interest for that month. Calculated as:
Starting Balance × Monthly Interest Rate. - Principal Paid: The portion of the monthly payment that reduces the loan principal. Calculated as:
Monthly Payment - Interest Paid. - Ending Balance: The remaining loan balance after the payment. Calculated as:
Starting Balance - Principal Paid.
As you progress through the table, you'll see the interest portion of your payment gradually decrease, while the principal portion increases, until the ending balance reaches zero at the end of the loan term.
When to Use a Personal Loan Calculator:
- Comparing Loan Offers: Input details from different loan offers to see which one results in the lowest monthly payment or total interest paid.
- Budgeting: Determine if a potential monthly payment fits within your budget before applying for a loan.
- Financial Planning: Understand the long-term cost of borrowing and plan your finances accordingly.
- Debt Consolidation: Assess how consolidating existing debts into a single personal loan could affect your monthly payments and overall interest costs.
Using this calculator can empower you to make informed decisions about personal loans, ensuring you borrow responsibly and understand the commitment involved.
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amortizationTableHtml += '';
amortizationTableHtml += '
';
amortizationTableHtml += 'Total Interest Paid (from table): ' + formatCurrency(totalInterestPaidAccumulated) + ";
amortizationTableHtml += '
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// Remove previous table if it exists, and append the new one
var existingTableContainer = document.getElementById("amortizationTableContainer");
if (existingTableContainer) {
existingTableContainer.remove();
}
document.querySelector('.loan-calc-container').insertAdjacentHTML('afterend', amortizationTableHtml);
}
// Initialize calculator on load with default values
document.addEventListener('DOMContentLoaded', calculateLoan);
| Month | Starting Balance | Payment | Interest Paid | Principal Paid | Ending Balance |
|---|---|---|---|---|---|
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