Monthly Payment: $0.00
Total Paid: $0.00
Total Interest Paid: $0.00
Understanding Your Loan Repayment
A loan repayment calculator with interest is a vital tool for anyone borrowing money, whether for a car, a home, personal expenses, or business ventures. It helps you estimate your monthly payments, the total amount you'll repay over the life of the loan, and the total interest you'll accrue. Understanding these figures upfront is crucial for budgeting and making informed financial decisions.
How the Calculation Works
The calculator uses a standard formula for an amortizing loan, which is a loan that is repaid over time with regular payments. Each payment consists of a portion of the principal amount borrowed and the interest accrued on the outstanding balance. The formula to calculate the monthly payment (M) is:
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 (annual rate divided by 12)
n = The total number of payments over the loan's lifetime (loan term in years multiplied by 12)
Breakdown of Variables:
Loan Amount (P): This is the principal sum you are requesting.
Annual Interest Rate: This is the yearly percentage charged by the lender. For the calculation, it must be converted into a monthly rate by dividing by 100 (to get a decimal) and then by 12. For example, an 8% annual rate becomes 0.08 / 12 = 0.006667 per month.
Loan Term (Years): This is the duration over which you agree to repay the loan. It's converted into months by multiplying by 12 to get the total number of payments (n). For instance, a 5-year loan means 60 payments.
Why Use This Calculator?
Budgeting: Accurately estimate how much you can afford to borrow based on your monthly income and expenses.
Comparison: Compare loan offers from different lenders. A slightly lower interest rate or a shorter term can save you thousands over time.
Debt Management: Understand the total cost of borrowing and plan for timely repayment.
Financial Planning: Assess the impact of different loan scenarios on your financial goals.
By inputting your loan amount, annual interest rate, and loan term, this calculator provides an immediate estimate of your monthly payment, the total amount you will repay, and the total interest paid. This empowers you to make more confident and responsible borrowing decisions.
function calculateLoanRepayment() {
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");
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0 ||
isNaN(annualInterestRate) || annualInterestRate < 0 ||
isNaN(loanTermYears) || loanTermYears <= 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
var monthlyInterestRate = (annualInterestRate / 100) / 12;
var numberOfPayments = loanTermYears * 12;
var monthlyPayment = 0;
var totalPaid = 0;
var totalInterestPaid = 0;
// Handle the case of 0% interest rate separately to avoid division by zero
if (monthlyInterestRate === 0) {
monthlyPayment = loanAmount / numberOfPayments;
totalPaid = loanAmount;
totalInterestPaid = 0;
} else {
// Standard amortization formula
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
totalPaid = monthlyPayment * numberOfPayments;
totalInterestPaid = totalPaid – loanAmount;
}
// Format the results for display
var formattedMonthlyPayment = monthlyPayment.toFixed(2);
var formattedTotalPaid = totalPaid.toFixed(2);
var formattedTotalInterestPaid = totalInterestPaid.toFixed(2);
resultDiv.innerHTML =
"Monthly Payment: $" + formattedMonthlyPayment + "" +
"Total Paid: $" + formattedTotalPaid + "" +
"Total Interest Paid: $" + formattedTotalInterestPaid + "";
}