Loan Calculator
Calculate loan payments, interest, and amortization.
Enter total annual amount. Included in PITI if loan type is Mortgage.
Enter total annual amount. Included in PITI if loan type is Mortgage.
Loan Summary
Payment per Period
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Total Principal Paid
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Total Interest Paid
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Total Cost of Loan
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Interest as % of Total Payments
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Loan Payoff Date
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Amortization Schedule
| # | Payment Date | Payment | Principal | Interest | Taxes | Insurance | Extra Payment | Balance |
|---|---|---|---|---|---|---|---|---|
| Enter loan details to see the amortization schedule. | ||||||||
Payment Breakdown
Loan Payoff Progress
Payoff progress visuals will appear here.
Complete Guide to Loan Calculations
Understanding Loan Calculations
Loan calculations are fundamental to making informed borrowing decisions. Whether you're considering a mortgage, auto loan, or personal loan, understanding how monthly payments are calculated can save you thousands of dollars over the life of your loan.
The basic loan payment calculation uses the following formula:
M = P [ r(1 + r)^n ] / [ (1 + r)^n - 1 ]
Where:
- M = Monthly payment
- P = Principal loan amount
- r = Monthly interest rate (annual rate ÷ 12)
- n = Total number of payments
Types of Loans
Mortgage Loans
Used to purchase real estate, typically with 15-30 year terms. Monthly payments include principal, interest, taxes, and insurance (PITI).
- • Fixed-rate mortgages
- • Adjustable-rate mortgages (ARM)
- • FHA, VA, and conventional loans
Auto Loans
Secured loans for vehicle purchases, typically 3-7 years. The vehicle serves as collateral for the loan.
- • New car loans (lower rates)
- • Used car loans
- • Lease vs. buy calculations
Personal Loans
Unsecured loans for various purposes like debt consolidation, home improvements, or major purchases.
- • Debt consolidation loans
- • Home improvement loans
- • Medical expense loans
Student Loans
Educational loans with special terms, often including deferment options and income-driven repayment plans.
- • Federal student loans
- • Private student loans
- • Loan forgiveness programs
Key Loan Terms to Understand
Principal
The original loan amount borrowed, excluding interest and fees.
Interest Rate
The annual percentage charged for borrowing money, expressed as APR.
Loan Term
The length of time you have to repay the loan, typically in years.
Monthly Payment
The fixed amount paid each month, including principal and interest.
Amortization
The process of paying off debt through regular payments over time.
Down Payment
The upfront payment made when purchasing, reducing the loan amount.
Origination Fee
A fee charged by the lender for processing the loan application.
Prepayment
Making extra payments toward the principal to pay off the loan early.
How to Use This Loan Calculator
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1
Enter Basic Information: Input your loan amount, interest rate, and loan term. Choose your payment frequency (monthly, bi-weekly, etc.).
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2
Select Loan Type: Choose between personal loan, auto loan, or mortgage to enable relevant features and calculations.
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3
Advanced Options: Toggle advanced settings to include fees, taxes, insurance, and extra payments for more accurate calculations.
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4
Calculate and Review: Click "Calculate" to see your monthly payment, total interest, and amortization schedule.
Money-Saving Tips
Interest Savings Strategies
- • Make extra principal payments to reduce interest over time
- • Choose shorter loan terms for lower total interest costs
- • Consider bi-weekly payments to make one extra payment per year
- • Refinance when rates drop to secure better terms
Better Loan Terms
- • Improve your credit score before applying for better rates
- • Shop around with multiple lenders to compare offers
- • Consider a larger down payment to reduce loan amount
- • Negotiate fees like origination and processing charges
Common Loan Mistakes to Avoid
Before Taking a Loan
- • Not checking your credit score first
- • Failing to shop around for rates
- • Borrowing more than you can afford
- • Ignoring additional fees and costs
- • Not reading the fine print
During the Loan Term
- • Making only minimum payments
- • Missing payment due dates
- • Not considering refinancing opportunities
- • Ignoring prepayment options
- • Not monitoring your loan balance
Frequently Asked Questions
What's the difference between APR and interest rate?
The interest rate is the cost of borrowing money, while APR (Annual Percentage Rate) includes the interest rate plus additional fees and costs, giving you a more complete picture of the loan's true cost.
Should I choose a shorter or longer loan term?
Shorter terms mean higher monthly payments but less total interest paid. Longer terms mean lower monthly payments but more total interest. Choose based on your budget and financial goals.
How much can I save by making extra payments?
Extra payments go directly toward the principal, reducing the loan balance and total interest paid. Even small extra payments can save thousands over the life of the loan.
When should I consider refinancing?
Consider refinancing when interest rates drop significantly, your credit score improves, or you want to change your loan terms. Factor in closing costs when deciding.
Ready to Calculate Your Loan?
Use our calculator above to find the perfect loan terms for your situation.