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Loan Calculator

Loan calculator online

Loan Calculator

Calculator Use

You can use the loan calculator to figure out your monthly payment, interest rate, number of months, or principal amount on a loan. You can see the effect on the payment amount by changing the loan amount, interest rate, and term.

You can create a loan amortization schedule to help calculate how much money you'll have to pay back in monthly installments if you take out a loan to purchase a car.

Loan Calculations

A bank will loan money to anyone that can afford the monthly payment (interest) and can prove they will pay it back.

A mortgage is an annuity you pay to a lending institution.

In the calculation of an amortization schedule we can use the formula for the present value of an ordinary annuity:

Calculation Options

Find the Loan Amount

You can use the loan amount equation in its original form to determine the loan amount.

This is an example. Your bank offers a loan at an annual interest rate of 6% and you are willing to pay $250 per month for 48 months.

How much of a loan can take?

Find the Loan Term (months) Interest Rate.% 6 Number of Months.48 Monthly Payment.

Secured Loans

Secured loans mean that a borrower must put up some asset as collateral before being granted a loan. The lien holder is a type of mortgage that attaches to your property when you fail to make payments on your loan.

In other words, defaulting on a secured loan will give the loan issuer the legal ability to seize the asset that was put up as collateral. Mortgage loans are the most common secured loans. They are most often used to buy homes and cars. In these examples, the bank holds the deed to the property, which is a representation of ownership, until the secured loan is fully paid.  Paying a mortgage on time keeps you from foreclosure, but defaulting on a car payment means the car lender can repossess it.

Lenders usually don’t lend large sums of money with no guarantee. Secured loans are safer to take than unsecured loans. A borrower who has borrowed money from the bank cannot escape paying the loan entirely by collateralizing the debt.

Loan applications generally have a higher chance of approval compared to unsecured loans, and these types of loans can be better options for those who may not qualify for an unsecured loan.

Unsecured Loans

Unsecured loans are not secured loans, because they are based on credit, not security. Since there is no collateral involved, lenders need a way to verify the financial integrity of their borrowers. This credit score or rating system is one of the most important factors for lenders to consider when assessing your application for a loan.

Unsecured loans are generally more expensive than secured loans. They have higher interest rates, lower borrowing limits, and shorter repayment terms.

Sometimes, lenders require a co-signer (a person who agrees to pay a borrower's debt if the borrower defaults) for unsecured loans if the lender believes the borrower to be a risky borrower.

Lenders may hire collection agencies to sue borrowers who have defaulted on their credit card, student loan or car loan.

A collection agency is a company that recovers money for past due payments or accounts in default.

Unsecured loans include credit cards, personal loans, and student loans.

You can use our Credit Card Calculator to help you work out what your monthly payment will be. You can use our Personal Loan Calculator to work out how much money you need to borrow.

Loan Term

A loan term is the length of time that you'll be required to make the minimum payment each month. This is a loan of $15,000 for 12 months. You'll be required to make a $1,000 payment every month (12 payments), which will be applied to the principal of the

Over time, the longer the term, the more interest you will have to pay. But because you only have to make one payment per month, you save money.

Compounding Frequency

Compound interest is the interest you earn on an amount every time you add it to itself.

When the interest rate on a credit card is compounded, it means the monthly payment is based on the principal amount due.

Most loans are based on a simple interest rate that doesn’t change. To calculate compound interest, use the Compound Interest Calculator.

Interest Rate

Nearly all loan structures include interest, which is the profit that banks or lenders make on loans. Interest rate is the amount of money charged to borrowers in order to borrow a certain amount of money. Most loans have an additional cost to pay back the interest.

Interest rates can include interest as well as fees. The annual percentage yield is the amount you’ll earn back on your money in interest. APY (Annual Percentage Yield) and APR (Annual Percentage Rate) are not the same.

Borrowers looking for a loan should use the Interest Calculator to find out how much the lender will actually charge them in terms of actual interest paid.

Visit the APR Calculator to determine the monthly payment for a loan that has an APR of 7.24% for 120 months.

Amortized Loan: Fixed Amount Paid Periodically

Consumer loans are usually repaid in full at the end of the term. A routine payment is a single amount you make on the due date. It’s typically the full amount of the loan plus any interest and fees. Some of the most familiar amortized loans include mortgages, car loans, student loans, and personal loans.

The word loan is probably a reference to this type in everyday conversation, not the type of calculations. Here are links to calculators related to loans that fall under this category. Some calculators may include more information or let you select a specific calculator based on the kind of loan you have. You may find it easier to use the loan calculator instead of the following for each specific need:

Deferred Payment Loan: Single Lump Sum Due at Loan Maturity

There are many different types of commercial loans or short-term loans, some of which are in this category.

The amount due at maturity for the second loan is significantly less than that of the first, so it's better to take out a small loan, rather than one with a larger monthly payment.

Many loans have smaller routine payments during their lifetimes, but this calculation only works for loans with a single payment of all principal and interest due at maturity.

Loan amount

This is the amount of money that you’d like to borrow. For example, if you want to take out a $5, 000 personal loan for home improvements, wedding costs or medical bills, you should enter that amount.

Set a budget

If you're considering borrowing money, you should calculate how much space there is in your monthly budget for taking on new debt.

Paying for services shouldn't be a struggle for you each month.

This is important to lenders. They look at your debt to income ratio to determine whether you qualify for a loan, and if so, how much they will lend you.

Decide if you want to put up collateral

If you’re considering a secured loan, make sure to take into consideration what the interest rate will be on your loan.

If you don’t pay your student loans, you could lose your home and other valuable assets.

Compare loan offers

Shop around and compare loans from multiple lenders. It's a good idea to shop around.

It is best to get a prequalification before applying for your loan.

The reason you should be getting prequalified is to get an idea of what your interest rates and loan terms could be, and if you make an inquiry on your credit reports

It's not a good idea to apply for a loan, just because you'd like to get one. You may not be able to get the loan you were hoping for because your rate and terms can change, and a hard credit inquiry may negatively impact your score.

 


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