This CAN Loan Calculator helps you estimate the monthly payments for a loan based on the principal amount, annual interest rate, and the loan term in years. The CAN loan, often referred to as a standard amortizing loan, is a common type of loan where each payment consists of both principal and interest.
How the Calculation Works (The Formula)
The formula used to calculate the monthly payment (M) for a standard amortizing loan is derived from the loan amortization formula:
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 interest rate by 12 (i.e., Annual Rate / 12).
n = The total number of payments over the loan's lifetime. This is calculated by multiplying the number of years in the loan term by 12 (i.e., Loan Term in Years * 12).
The calculator takes your inputs for Loan Amount, Annual Interest Rate, and Loan Term, converts the annual rate to a monthly rate and the term in years to the total number of months, and then applies this formula to determine your estimated monthly payment.
Key Considerations for CAN Loans:
Amortization: Early payments primarily cover interest, while later payments increasingly contribute to the principal.
Interest Rate: A higher interest rate will result in higher monthly payments and more interest paid over the life of the loan.
Loan Term: A longer loan term will result in lower monthly payments but more interest paid overall. A shorter term means higher monthly payments but less total interest.
Principal Amount: The larger the loan amount, the higher your monthly payments will be.
Use this calculator as a tool to get a quick estimate. For precise figures and loan offers, it's always best to consult with a financial institution or lender.
function calculateCanLoan() {
var loanAmountInput = document.getElementById("loanAmount");
var interestRateInput = document.getElementById("interestRate");
var loanTermInput = document.getElementById("loanTerm");
var resultDiv = document.getElementById("result");
var resultValueDiv = document.getElementById("result-value");
var principal = parseFloat(loanAmountInput.value);
var annualInterestRate = parseFloat(interestRateInput.value);
var loanTermYears = parseFloat(loanTermInput.value);
if (isNaN(principal) || isNaN(annualInterestRate) || isNaN(loanTermYears) ||
principal <= 0 || annualInterestRate < 0 || 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 case of 0% interest
monthlyPayment = principal / numberOfPayments;
} else {
monthlyPayment = principal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
}
if (isNaN(monthlyPayment) || !isFinite(monthlyPayment)) {
alert("Calculation error. Please check your inputs.");
resultDiv.style.display = 'none';
return;
}
resultValueDiv.textContent = "$" + monthlyPayment.toFixed(2);
resultDiv.style.display = 'block';
}