Loan Calculator
Estimate your monthly payments and total interest costs.
Why Use a Loan Calculator?
Borrowing money is a significant financial commitment. Whether you're buying a new car, purchasing a home, or taking out a personal loan, understanding the true cost of the loan is crucial. A Loan Calculator helps you see beyond the "sticker price" and understand how interest rates and loan terms affect your monthly budget.
By adjusting the loan amount, interest rate, and term length, you can find a payment plan that fits your financial situation comfortably.
How to Use
- Loan Amount: Enter the total amount you plan to borrow (principal).
- Interest Rate: Enter the annual interest rate (APR) offered by the lender.
- Loan Term: Enter the number of years you have to pay back the loan.
- Analyze: Instantly see your estimated Monthly Payment, Total Interest paid over the life of the loan, and the Total Cost.
Understanding the Results
- Monthly Payment: This is the amount you must pay every month to pay off the loan by the end of the term.
- Total Interest: This is the "cost" of borrowing. It's money paid to the lender on top of the original loan amount.
- Total Cost: Principal + Interest. This is the actual amount of money leaving your pocket.
FAQ
Q. Does this calculator work for mortgages?
A. Yes, it uses the standard amortization formula used for fixed-rate mortgages, auto loans, and personal loans. However, it does not include extra costs like property taxes, insurance, or HOA fees often associated with mortgages.
Q. How can I lower my monthly payment?
A. You can lower your payment by: 1) Borrowing less, 2) Securing a lower interest rate (improve your credit score), or 3) Extending the loan term (though this increases total interest paid).
Q. What is APR?
A. APR stands for Annual Percentage Rate. It represents the yearly cost of the loan, including interest and fees, expressed as a percentage.