Calculate your estimated monthly payments for a secured loan.
Estimated Monthly Payment
$0.00
Understanding Secured Loans and Your Monthly Payment
A secured loan is a type of loan where the borrower pledges an asset as collateral to the lender. This collateral, such as a house, car, or savings account, provides security for the loan. If the borrower defaults on the loan payments, the lender has the right to seize and sell the collateral to recover their losses. Because of this reduced risk for the lender, secured loans often come with lower interest rates and more favorable terms compared to unsecured loans.
Common examples of secured loans include:
Mortgages: Loans used to purchase real estate, with the property itself serving as collateral.
Auto Loans: Loans used to finance the purchase of a vehicle, with the vehicle as collateral.
Home Equity Loans/Lines of Credit: Loans that allow homeowners to borrow against the equity they have built in their home.
Secured Personal Loans: Personal loans backed by assets like savings accounts or certificates of deposit (CDs).
This calculator helps you estimate the monthly payment for a secured loan based on the loan amount, annual interest rate, and the loan term in months. Understanding your potential monthly payments is crucial for budgeting and financial planning.
How the Monthly Payment is Calculated
The monthly payment for a loan is calculated using the following standard annuity formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment
P = The principal loan amount (the amount you borrow)
i = Your *monthly* interest rate (your annual interest rate divided by 12)
n = The total number of *payments* over the loan's lifetime (the loan term in months)
For example, if you have a loan amount of $50,000, an annual interest rate of 5.5%, and a loan term of 60 months:
Plugging these values into the formula would yield the estimated monthly payment. Our calculator automates this process for you.
Disclaimer: This calculator provides an estimate for informational purposes only. Actual loan payments may vary based on the lender's specific terms, fees, and your individual credit profile. It is recommended to consult with a financial institution for precise loan details.
function calculateSecuredLoan() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var annualInterestRate = parseFloat(document.getElementById("annualInterestRate").value);
var loanTermMonths = parseInt(document.getElementById("loanTermMonths").value);
var resultValueElement = document.getElementById("result-value");
if (isNaN(loanAmount) || loanAmount <= 0 ||
isNaN(annualInterestRate) || annualInterestRate < 0 ||
isNaN(loanTermMonths) || loanTermMonths 0) {
// Standard amortization formula
monthlyPayment = loanAmount * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else {
// Simple division if interest rate is 0
monthlyPayment = loanAmount / numberOfPayments;
}
// Format the result to two decimal places
var formattedMonthlyPayment = "$" + monthlyPayment.toFixed(2);
resultValueElement.textContent = formattedMonthlyPayment;
resultValueElement.style.color = "#28a745"; // Green for success
}