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Total Amount Paid (Principal + Interest)
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Total Interest Paid
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Estimated Monthly Payment
Understanding Your Loan's Total Cost
Taking out a loan can be a significant financial decision. While the initial loan amount (principal) is straightforward, the true cost of borrowing includes not only the principal but also the accumulated interest over the life of the loan. This Loan Total Cost Calculator helps you understand the full financial commitment by calculating the total amount you'll repay and the total interest you'll pay.
How is the Total Cost Calculated?
The calculation involves a few key components:
Loan Amount (Principal): The initial sum of money borrowed.
Annual Interest Rate: The yearly percentage charged on the outstanding loan balance.
Loan Term: The duration over which the loan is to be repaid, typically expressed in months.
The calculator first determines the estimated monthly payment using the standard loan amortization formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Monthly Payment
P = Principal Loan Amount
i = Monthly Interest Rate (Annual Interest Rate / 12)
n = Total Number of Payments (Loan Term in Months)
Once the monthly payment is calculated, the total cost and total interest are determined:
Total Amount Paid = Monthly Payment * Loan Term (in Months)
Total Interest Paid = Total Amount Paid – Loan Amount (Principal)
Why is Knowing the Total Cost Important?
Understanding the total cost of a loan provides crucial insights:
Budgeting: Helps you accurately budget for loan repayments over their entire duration.
Comparison: Allows you to compare different loan offers from various lenders more effectively. A loan with a lower advertised interest rate might not always be cheaper if the term is longer or fees are involved (though this calculator focuses on principal, rate, and term).
Financial Planning: Essential for making informed financial decisions, whether you're buying a car, a home, or consolidating debt.
Use this calculator to estimate the financial impact of your borrowing. Remember that this is an estimate, and actual loan costs may vary based on specific lender fees, repayment schedules, and changes in interest rates for variable-rate loans.
function calculateLoanCost() {
var principal = parseFloat(document.getElementById("principalAmount").value);
var annualRate = parseFloat(document.getElementById("annualInterestRate").value);
var termMonths = parseInt(document.getElementById("loanTermMonths").value);
var resultDiv = document.getElementById("result");
var totalCostDisplay = document.getElementById("totalCostDisplay");
var totalInterestDisplay = document.getElementById("totalInterestDisplay");
var monthlyPaymentDisplay = document.getElementById("monthlyPaymentDisplay");
// Clear previous results and styling
totalCostDisplay.textContent = "–";
totalInterestDisplay.textContent = "–";
monthlyPaymentDisplay.textContent = "–";
resultDiv.style.borderColor = "var(–border-color)";
resultDiv.style.backgroundColor = "var(–light-background)";
// Input validation
if (isNaN(principal) || principal <= 0) {
alert("Please enter a valid loan amount greater than zero.");
return;
}
if (isNaN(annualRate) || annualRate < 0) {
alert("Please enter a valid annual interest rate (0% or higher).");
return;
}
if (isNaN(termMonths) || termMonths <= 0) {
alert("Please enter a valid loan term in months (greater than zero).");
return;
}
var monthlyRate = annualRate / 100 / 12;
var calculatedMonthlyPayment = 0;
var totalPaid = 0;
var totalInterest = 0;
if (monthlyRate === 0) {
// Simple interest calculation if rate is 0%
calculatedMonthlyPayment = principal / termMonths;
totalPaid = principal;
totalInterest = 0;
} else {
// Standard amortization formula
var numerator = monthlyRate * Math.pow(1 + monthlyRate, termMonths);
var denominator = Math.pow(1 + monthlyRate, termMonths) – 1;
calculatedMonthlyPayment = principal * (numerator / denominator);
totalPaid = calculatedMonthlyPayment * termMonths;
totalInterest = totalPaid – principal;
}
// Format results for display
var formattedTotalPaid = totalPaid.toFixed(2);
var formattedTotalInterest = totalInterest.toFixed(2);
var formattedMonthlyPayment = calculatedMonthlyPayment.toFixed(2);
totalCostDisplay.textContent = "$" + formattedTotalPaid;
totalInterestDisplay.textContent = "$" + formattedTotalInterest;
monthlyPaymentDisplay.textContent = "$" + formattedMonthlyPayment;
// Add a little visual flair to the results
resultDiv.style.borderColor = "var(–success-green)";
resultDiv.style.backgroundColor = "#e9f7ec";
}