Loan Payment Calculator
:root {
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/* Responsive adjustments */
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Loan Payment Calculator
Calculate your estimated monthly loan payments.
Loan Amount ($)
Annual Interest Rate (%)
Loan Term (Years)
Calculate Payment
Understanding Your Loan Payment Calculation
Calculating the monthly payment for a loan is a crucial step in understanding your financial obligations.
Whether it's a mortgage, auto loan, or personal loan, knowing your estimated payment helps with budgeting and financial planning.
The standard formula used to calculate the monthly payment for an amortizing loan is derived from the principles of
annuity calculations.
The Formula
The formula for calculating the monthly loan payment (M) is:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly loan paymentP = The principal loan amount (the total amount of money borrowed)i = Your monthly interest rate. This is calculated by dividing your Annual Interest Rate by 12 (and converting the percentage to a decimal). For example, if your annual rate is 6%, your monthly rate (i) is 0.06 / 12 = 0.005.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 has 5 * 12 = 60 payments.
How the Calculator Works
This calculator takes the values you enter for the Loan Amount , Annual Interest Rate , and Loan Term (Years) .
It then applies the formula above:
It converts the Annual Interest Rate into a monthly interest rate (i).
It calculates the total number of monthly payments (n) based on the loan term in years.
It plugs these values, along with the Loan Amount (P), into the formula to compute your estimated Monthly Payment (M).
Example Calculation
Let's say you want to take out a loan with the following details:
Loan Amount (P): $15,000Annual Interest Rate: 7.5%Loan Term: 4 Years
Here's how the calculation breaks down:
Principal (P): $15,000Monthly Interest Rate (i): 7.5% / 12 = 0.075 / 12 = 0.00625Total Number of Payments (n): 4 years * 12 months/year = 48 months
Plugging these into the formula:
M = 15000 [ 0.00625(1 + 0.00625)^48 ] / [ (1 + 0.00625)^48 – 1]M = 15000 [ 0.00625 * (1.00625)^48 ] / [ (1.00625)^48 – 1]M = 15000 [ 0.00625 * 1.348850 ] / [ 1.348850 – 1]M = 15000 [ 0.0084303 ] / [ 0.348850 ]M = 15000 * 0.024165M ≈ $362.48
So, the estimated monthly payment for this loan would be approximately $362.48.
Important Considerations
This calculator provides an estimate . Actual loan payments may vary slightly due to lender-specific calculations or fees.
The interest rate used is the annual percentage rate (APR) .
This calculation assumes a standard amortizing loan where each payment includes both principal and interest.
Additional fees, such as origination fees or insurance, are not included in this calculation.
function calculateLoanPayment() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermYears = parseFloat(document.getElementById("loanTermYears").value);
var resultDiv = document.getElementById("result");
resultDiv.style.display = "none"; // Hide previous result
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0) {
alert("Please enter a valid loan amount greater than zero.");
return;
}
if (isNaN(annualInterestRate) || annualInterestRate 100) {
alert("Please enter a valid annual interest rate between 0 and 100%.");
return;
}
if (isNaN(loanTermYears) || loanTermYears 0) {
resultDiv.innerHTML = "Estimated Monthly Payment:
$" + monthlyPayment.toFixed(2) + " ";
resultDiv.style.display = "block";
} else {
alert("Could not calculate the loan payment. Please check your inputs.");
}
}