Loan Calculator Excel

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Reviewed by: David Chen, CFA | Updated: October 2023
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Looking for a professional loan calculator excel alternative? This interactive tool mimics the logic of Excel’s PMT, PV, and NPER functions, allowing you to calculate monthly payments, total interest, or the loan amount needed based on your financial goals.

Loan Calculator Excel

Enter any 3 values to calculate the missing 4th variable. Leave the field you want to solve for empty.

Calculated Result:
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Loan Calculator Excel Formula

$$M = P \frac{r(1+r)^n}{(1+r)^n – 1}$$

Where $M$ is Monthly Payment, $P$ is Principal, $r$ is monthly interest rate, and $n$ is total months.

Formula Source: Microsoft Support (PMT Function) | Investopedia

Variables:

  • Loan Amount: The total sum of money borrowed initially.
  • Annual Interest Rate: The percentage charged by the lender annually.
  • Loan Term: The duration over which the loan will be repaid.
  • Monthly Payment: The recurring amount paid every month to clear the debt.

Related Calculators

What is Loan Calculator Excel?

A loan calculator excel is a financial modeling tool used to determine the cost of borrowing. It utilizes standard time-value-of-money equations to simulate how interest accrues over time and how principal balances decrease with each payment.

Using an automated calculator prevents manual errors often found in complex spreadsheets. It helps users compare different loan offers by adjusting interest rates and terms to see the immediate impact on their monthly cash flow.

How to Calculate Loan Calculator Excel (Example)

  1. Identify your loan principal (e.g., $10,000).
  2. Convert your annual rate to a monthly decimal (e.g., 6% / 12 / 100 = 0.005).
  3. Define the term in months (e.g., 5 years = 60 months).
  4. Apply the PMT formula or use an Excel function like =PMT(0.06/12, 60, -10000).

Frequently Asked Questions (FAQ)

How do I use the PMT function in Excel for loans?

The syntax is =PMT(rate, nper, pv). Remember to divide the annual rate by 12 and multiply the years by 12 for monthly accuracy.

What happens if I make extra payments?

Extra payments reduce the principal balance faster, which significantly lowers the total interest paid over the life of the loan.

Does this calculator work for car loans?

Yes, the mathematical principles for personal, student, and car loans are identical, provided the interest is compounded monthly.

Why is my bank’s payment slightly different?

Lenders may use different rounding methods or include mandatory insurance and fees in the monthly installment.

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