Calculate the total cost of your loan, including interest.
Your Total Loan Cost Is:
$0.00
Understanding Loan Costs
This calculator helps you determine the total amount you will repay over the life of a loan,
which includes the original principal amount borrowed plus all the interest paid. Understanding
the total cost is crucial for making informed financial decisions.
How it Works:
The calculator uses the standard formula for calculating the monthly payment of an amortizing loan,
and then multiplies that by the total number of payments to arrive at the total repayment amount.
1. Monthly Interest Rate:
First, the annual interest rate is converted into a monthly interest rate.
Monthly Interest Rate = (Annual Interest Rate / 100) / 12
2. Number of Payments:
The total number of payments is calculated by multiplying the loan term in years by 12.
Number of Payments = Loan Term (Years) * 12
3. Monthly Payment (M):
The formula for the monthly payment (M) of an amortizing loan is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
P = Principal loan amount
i = Monthly interest rate (as a decimal)
n = Total number of payments (loan term in months)
4. Total Repayment Amount:
The total cost of the loan is then calculated by multiplying the monthly payment by the total number of payments.
Total Repayment = Monthly Payment * Number of Payments
The interest paid is the difference between the total repayment and the principal.
Total Interest Paid = Total Repayment - Principal
Use Cases:
Personal Loans: Estimate the total cost of personal loans for various purposes.
Auto Loans: Understand how much you'll actually pay for a car over the loan term.
Mortgages: Get a preliminary idea of the total cost of home financing (note: mortgage calculations can be more complex due to escrows, PMI, etc.).
Debt Consolidation: Compare the total cost of consolidating existing debts into a new loan.
By using this calculator, you can better estimate your financial obligations and compare different loan offers effectively.
function calculateLoanCost() {
var principal = parseFloat(document.getElementById("principal").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var resultDiv = document.getElementById("result");
var totalCostOutput = document.getElementById("totalCostOutput");
if (isNaN(principal) || principal <= 0 ||
isNaN(annualInterestRate) || annualInterestRate < 0 ||
isNaN(loanTermYears) || loanTermYears <= 0) {
alert("Please enter valid positive numbers for all fields.");
resultDiv.style.display = 'none';
return;
}
var monthlyInterestRate = (annualInterestRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPayment;
if (monthlyInterestRate === 0) {
// Handle zero interest rate case to avoid division by zero
monthlyPayment = principal / numberOfPayments;
} else {
// M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
var numerator = Math.pow(1 + monthlyInterestRate, numberOfPayments);
monthlyPayment = principal * (monthlyInterestRate * numerator) / (numerator – 1);
}
var totalRepayment = monthlyPayment * numberOfPayments;
var totalInterest = totalRepayment – principal;
// Format the output to two decimal places for currency
totalCostOutput.textContent = "$" + totalRepayment.toFixed(2);
resultDiv.style.display = 'block';
}