Enter the debt amount in your selected currency.
Enter the annual interest rate.
Enter the loan term in months.
History:

Explanation

How to calculate debt repayment?

The Debt Repayment Calculator allows you to determine how much you will need to pay each month to repay a loan, as well as the total amount you will pay over the life of the loan and the total interest incurred. The calculations are based on the following formula:

Monthly Payment (M) can be calculated using the formula:

§§ M = \frac{P \times r}{1 - (1 + r)^{-n}} §§

where:

  • § M § — monthly payment
  • § P § — principal amount (debt amount)
  • § r § — monthly interest rate (annual interest rate divided by 12)
  • § n § — total number of payments (loan term in months)

Total Payment (TP) is calculated as:

§§ TP = M \times n §§

where:

  • § TP § — total payment over the loan term
  • § M § — monthly payment
  • § n § — total number of payments

Total Interest (TI) can be calculated as:

§§ TI = TP - P §§

where:

  • § TI § — total interest paid
  • § TP § — total payment
  • § P § — principal amount

Example:

Let’s say you have the following loan details:

  • Debt Amount (P): $10,000
  • Interest Rate: 5% per annum
  • Loan Term: 12 months

  1. Calculate the monthly interest rate (r):

    • § r = \frac{5}{100} \div 12 = 0.004167 §

  2. Calculate the monthly payment (M):

    • § M = \frac{10000 \times 0.004167}{1 - (1 + 0.004167)^{-12}} \approx 856.07 §

  3. Calculate the total payment (TP):

    • § TP = 856.07 \times 12 \approx 10272.84 §

  4. Calculate the total interest (TI):

    • § TI = 10272.84 - 10000 \approx 272.84 §

When to use the Debt Repayment Calculator?

  1. Loan Planning: Determine how much you can afford to borrow based on your monthly budget.

    • Example: Assessing the impact of a new car loan on your monthly expenses.

  2. Debt Management: Understand the implications of different interest rates and loan terms on your repayments.

    • Example: Comparing offers from different lenders.

  3. Financial Forecasting: Plan for future expenses by understanding how debt repayment will affect your finances.

    • Example: Preparing for a major purchase or investment.

  4. Refinancing Decisions: Evaluate whether refinancing your existing debt will save you money.

    • Example: Calculating potential savings from a lower interest rate.

  5. Budgeting: Incorporate debt repayments into your monthly budget to ensure you can meet your obligations.

    • Example: Adjusting your spending habits based on your debt repayment schedule.

Practical examples

  • Personal Loans: Use the calculator to determine monthly payments for personal loans, helping you decide how much to borrow.
  • Student Loans: Calculate the repayment amounts for student loans to plan your finances after graduation.
  • Mortgage Payments: Estimate monthly mortgage payments to understand how much house you can afford.

Use the calculator above to input different values and see how your monthly payments, total payment, and total interest change dynamically. The results will help you make informed decisions about your debt and financial future.