Loan Payment Calculator

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Loan Payment Calculator
Calculate Monthly PaymentCalculate Loan Amount (Principal)
Results:
function calculateLoan(){var type=document.getElementById('calc_type').value;var v1=parseFloat(document.getElementById('input1').value);var v2=parseFloat(document.getElementById('input2').value);var v3=parseFloat(document.getElementById('input3').value);var showSteps=document.getElementById('steps').checked;if(isNaN(v1)||isNaN(v2)||isNaN(v3)){alert('Please enter valid numeric values for all fields');return;}var rate=v2/100/12;var months=v3*12;if(type==='payment'){var pmt=(rate===0)?v1/months:(v1*rate)/(1-Math.pow(1+rate,-months));var total=pmt*months;var interest=total-v1;document.getElementById('res_primary').innerHTML='Monthly Payment: $'+pmt.toFixed(2);if(showSteps){document.getElementById('res_secondary').innerHTML='Total Payments: $'+total.toFixed(2)+'
Total Interest: $'+interest.toFixed(2);}else{document.getElementById('res_secondary').innerHTML=";}}else{var pv=(rate===0)?v1*months:(v1*(1-Math.pow(1+rate,-months)))/rate;document.getElementById('res_primary').innerHTML='Loan Amount (Principal): $'+pv.toFixed(2);document.getElementById('res_secondary').innerHTML='Based on $'+v1+' monthly payment at '+v2+'% interest for '+v3+' years.';}}

Calculator Use

The loan payment calculator is a comprehensive tool designed to help you estimate your monthly financial obligations when taking out a loan. Whether you are looking for a personal loan, an auto loan, or a small business line of credit, this calculator provides immediate clarity on what your repayment schedule will look like.

By entering just three key pieces of information, you can compare different lending scenarios and find a payment plan that fits your monthly budget.

Loan Amount
This is the total sum of money you intend to borrow (the principal).
Interest Rate
The annual interest rate (APR) charged by the lender, expressed as a percentage.
Loan Term
The duration of the loan, usually expressed in years, over which you will repay the debt.

How It Works

When you use a loan payment calculator, the system applies the standard amortization formula to determine the fixed monthly payment. This ensures that by the end of the term, the principal is paid down to zero through equal installments.

PMT = [ r * PV ] / [ 1 – (1 + r)^-n ]

  • PMT = Monthly Payment
  • PV = Present Value (Principal amount)
  • r = Monthly Interest Rate (Annual Rate / 12 months)
  • n = Total number of months (Years * 12 months)

Calculation Example

Example: Suppose you borrow $20,000 for a car at an annual interest rate of 6% for a period of 5 years.

Step-by-step solution:

  1. Principal (PV) = $20,000
  2. Monthly Rate (r) = 0.06 / 12 = 0.005
  3. Total Months (n) = 5 * 12 = 60
  4. Calculate: PMT = [0.005 * 20000] / [1 – (1.005)^-60]
  5. Monthly Payment = $386.66
  6. Total Interest Paid = ($386.66 * 60) – $20,000 = $3,199.60

Common Questions

How does interest affect my loan payment?

The interest rate is essentially the "cost" of borrowing. A higher rate increases your monthly payment and the total amount of interest paid over the life of the loan. Even a 1% difference can cost thousands of dollars over a long-term loan.

Should I choose a longer or shorter loan term?

A shorter term (e.g., 3 years) results in higher monthly payments but significantly lower total interest. A longer term (e.g., 6 years) lowers the monthly payment to make it more affordable but increases the total cost of the loan due to interest accruing over more time.

Can I pay off my loan early?

Most personal and auto loans allow for early repayment without penalty, which saves you money on interest. However, always check your loan agreement for "prepayment penalties" before making extra payments.

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