Calculate monthly payments, total interest, and amortization schedule for any loan. Perfect for mortgages, car loans, and personal loans.
Our loan calculator helps you understand the financial commitment of borrowing money. It calculates:
Even a small reduction in interest rate can save thousands in interest over the life of a loan.
Making extra payments toward principal can significantly reduce loan term and total interest.
Borrowing money is a significant financial decision that requires careful consideration of the costs involved. Our free online loan calculator empowers you to make informed decisions by providing detailed insights into monthly payments, total interest, and the long-term financial impact of any loan. Whether you're considering a mortgage, car loan, or personal loan, this tool is essential for effective financial planning.
Loan calculations are based on the amortization formula, which determines fixed monthly payments over the loan term. The formula is: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1], where M is the monthly payment, P is the principal loan amount, i is the monthly interest rate, and n is the number of payments (months). This ensures that each payment covers both principal and interest, with the proportion changing over time.
The principal is the original amount borrowed. It forms the base on which interest is calculated. As you make payments, the principal balance decreases, reducing the amount of interest charged in subsequent periods.
The interest rate is the cost of borrowing, expressed as a percentage of the principal. It can be fixed (remaining the same throughout the loan term) or variable (changing based on market conditions). Even small differences in interest rates can result in significant differences in total cost over the life of a loan.
The loan term is the duration over which the loan must be repaid. Longer terms result in lower monthly payments but higher total interest costs. Shorter terms mean higher monthly payments but less total interest paid.
Mortgages are typically the largest loans most people take, with terms ranging from 10 to 30 years. They often involve substantial down payments and are secured by the property being purchased. Mortgage interest rates are influenced by credit scores, down payment size, and economic conditions.
Auto loans are secured by the vehicle being purchased, typically with terms of 3 to 7 years. Interest rates depend on credit history, loan term, and the age of the vehicle. New car loans generally have lower interest rates than used car loans.
Personal loans are typically unsecured, meaning they don't require collateral. They often have higher interest rates than secured loans but can be used for any purpose. Terms usually range from 1 to 7 years.
Several strategies can help reduce the total cost of borrowing:
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