Loan Calculator

The Loan Calculator helps you understand the financial implications of a loan by calculating the periodic payment amount, total payment over time, total interest paid, and providing a detailed amortization schedule.

Tips:

Higher down payments can significantly reduce your total interest costs.
More frequent payments (weekly, bi-weekly) typically result in lower total interest.
Shorter loan terms mean higher payments but less total interest paid.

Enter loan details to see payment information.

About Loan Calculator

The Loan Calculator helps you understand the financial implications of a loan by calculating the periodic payment amount, total payment over time, total interest paid, and providing a detailed amortization schedule.

Whether you're planning to take out a mortgage, auto loan, personal loan, or any other form of installment credit, this calculator provides clear insights into your payment obligations and the total cost of borrowing.

How to Use This Calculator

Enter the following information to calculate your loan payments:

Loan Amount: The total principal amount you need to borrow. This is the base value of the loan, not including interest or fees.
Interest Rate: The annual interest rate (APR) applied to your loan, expressed as a percentage. For example, enter 5 for a 5% interest rate.
Loan Term: The duration of your loan in years. This determines how long you'll be making payments.
Payment Frequency: How often you make payments—monthly, bi-weekly, or weekly. This affects your payment amount and total interest paid.
Down Payment: The initial payment you make toward the purchase, which reduces the loan amount. Enter 0 if there's no down payment.
Additional Fees: Any upfront fees or costs associated with the loan, such as origination fees or closing costs, that are added to the loan amount.

Once you've entered all required information, the calculator will automatically update the results showing your payment details, total costs, and the complete amortization schedule.

Formulas Used

The loan calculator uses the following standard formulas for calculating loan payments:

Payment Amount Formula

For fixed-rate loans with periodic payments, the formula is:

Payment = L \times \frac{r(1+r)^n}{(1+r)^n - 1}

Where:

Symbol	Description
L	Loan amount (principal)
r	Periodic interest rate (annual rate divided by number of payment periods per year)
n	Total number of payments

Amortization Calculations

For each payment in the amortization schedule:

Interest paid in period = $Balance \times r$
Principal paid in period = $Payment - Interest$
New remaining balance = $Balance_{previous} - Principal$

Other Calculations

Total payment = $Payment \times n$
Total interest = $Total_{payment} - L$
Effective loan amount = $L - Down_{payment} + Fees$

Understanding Your Results

Payment Summary

The payment summary shows your periodic payment amount, the total payment over the loan term, total interest paid, and loan term details. These key metrics help you quickly assess the cost of the loan and your regular payment obligation.

Payment Breakdown

The payment breakdown illustrates how your payments are distributed between principal, interest, and fees. This helps you understand what portion of your money goes toward building equity versus cost of borrowing.

Amortization Schedule

The amortization chart shows how your loan balance decreases over time and how each payment is split between principal and interest. You can toggle between yearly and detailed views, and switch between chart and table formats.

In the early years of a long-term loan, you'll notice that a large portion of each payment goes toward interest, with a smaller amount reducing the principal. As the loan matures, this ratio shifts, with more of each payment going toward principal reduction.

Frequently Asked Questions

How does payment frequency affect my loan?

Making more frequent payments (bi-weekly or weekly instead of monthly) can reduce the total interest paid over the life of the loan. This happens because you make more payments per year (26 bi-weekly or 52 weekly payments versus 12 monthly payments), which reduces the principal more quickly and results in less interest accruing.

Why is the total interest so high on long-term loans?

Long-term loans (like 30-year mortgages) have smaller monthly payments but significantly higher total interest costs because you're borrowing the money for a longer period. Each extra year adds another year of interest payments, which can substantially increase the total cost.

Should I include property taxes and insurance in my mortgage calculation?

This basic loan calculator doesn't include property taxes and insurance. For a more comprehensive mortgage calculation, consider using the Mortgage Tax Calculator which includes these additional costs. However, you can estimate these additional expenses separately and add them to your calculated payment amount to budget accurately.

How do extra payments affect my loan?

Making extra payments toward the principal can significantly reduce the loan term and total interest paid. Even small additional payments can make a big difference over time. This calculator doesn't simulate extra payments, but you can use the information to understand the benefits of paying more than the minimum.

How accurate is this calculator?

This calculator uses standard financial formulas and provides a good approximation of loan payments and costs. However, actual loan terms may vary based on lender-specific practices, rounding, compounding methods, and other factors. Always review your loan documents for the exact terms and conditions.

Real-World Applications

Mortgage Planning: Calculate payments for home loans of different amounts, terms, or interest rates to find the best option for your budget.
Auto Loan Comparison: Compare financing options from different lenders or dealers to identify the most cost-effective choice.
Education Financing: Understand the long-term implications of student loans and plan for repayment.
Business Loans: Evaluate different financing options for business expansion or equipment purchases.
Personal Financial Planning: Incorporate loan payments into your overall budget and financial plan.