The Annual Percentage Rate (APR) Repayment Calculator is a vital tool for understanding the true cost of borrowing money. It helps you estimate your fixed monthly payments for a loan based on the principal amount, the APR, and the loan term. APR is crucial because it includes not only the nominal interest rate but also most of the fees and other costs associated with a loan, giving a more accurate picture of your borrowing costs.
How the Calculation Works
The calculator uses a standard loan amortization formula to determine the fixed monthly payment. The formula is as follows:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly loan payment.
P = The principal loan amount (the amount you borrow).
i = Your monthly interest rate. This is calculated by dividing the Annual Percentage Rate (APR) by 12. For example, if your APR is 15%, your monthly interest rate is 0.15 / 12 = 0.0125.
n = The total number of payments over the loan's lifetime. This is calculated by multiplying the loan term in years by 12. For example, a 5-year loan will have 5 * 12 = 60 payments.
The calculator takes the inputs you provide (Loan Amount, APR, Loan Term) and plugs them into this formula to output your estimated fixed monthly repayment amount.
Why Use This Calculator?
Budgeting: Accurately forecast your monthly expenses for loans, mortgages, car financing, or personal loans.
Comparison: Compare loan offers from different lenders. A lower APR generally means a lower overall cost, but this calculator helps you see the impact on your monthly cash flow.
Financial Planning: Make informed decisions about taking on new debt by understanding the commitment involved.
Understanding Loan Costs: Beyond just the interest rate, the APR gives a more comprehensive view of borrowing costs. This calculator shows the direct impact of that APR on your repayment schedule.
By using this APR Repayment Calculator, you can gain clarity and confidence in your borrowing decisions.
function calculateRepayment() {
var loanAmountInput = document.getElementById("loanAmount");
var annualPercentageRateInput = document.getElementById("annualPercentageRate");
var loanTermInput = document.getElementById("loanTerm");
var resultValueElement = document.getElementById("result-value");
var P = parseFloat(loanAmountInput.value);
var apr = parseFloat(annualPercentageRateInput.value);
var years = parseFloat(loanTermInput.value);
if (isNaN(P) || P <= 0) {
alert("Please enter a valid loan amount greater than zero.");
loanAmountInput.focus();
return;
}
if (isNaN(apr) || apr < 0) {
alert("Please enter a valid APR (percentage) that is zero or greater.");
annualPercentageRateInput.focus();
return;
}
if (isNaN(years) || years <= 0) {
alert("Please enter a valid loan term in years, greater than zero.");
loanTermInput.focus();
return;
}
var monthlyInterestRate = apr / 100 / 12;
var numberOfPayments = years * 12;
var monthlyRepayment;
if (monthlyInterestRate === 0) {
monthlyRepayment = P / numberOfPayments;
} else {
monthlyRepayment = P * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
resultValueElement.innerHTML = "$" + monthlyRepayment.toFixed(2);
}