What is a loan payment calculator?

The loan payment calculator is a handy tool to compute the required monthly (or any other frequency) payments after taking a loan requiring equal payments. For example, you can estimate your car payment or mortgage installments.

How does a loan calculator work?

A loan calculator uses basic information to estimate your installment payments and give you an idea of how much interest you’d pay over the life of the loan. Let’s say you want to borrow $10,000 to update part of your home. The lender has offered a 5.99% interest rate on a three-year loan.

What are the results of the loan calculator?

Here’s how to understand the results of what you entered into the loan calculator. Monthly payment: This refers to how much you’d need to pay per month, with this payment covering principal and interest. Total interest payments: This estimates the amount you will have paid, on top of the amount you borrow, by the time the loan is paid in full.

How do you calculate a loan amount?

To calculate the loan amount we use the loan equation formula in original form: Example: Your bank offers a loan at an annual interest rate of 6% and you are willing to pay $250 per month for 4 years (48 months). How much of a loan can to take? Be sure P/Y is set to 12 for monthly payments (12 payments per year and monthly compounding).