Enter the loan amount in dollars.
Enter the interest rate as a percentage.
Enter the loan term in years.
History:

Explanation

How to calculate your monthly loan payment?

To determine your monthly loan payment, you can use the following formula:

Monthly Payment (M) is calculated as:

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

where:

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

This formula allows you to calculate how much you will need to pay each month to repay your loan over the specified term.

Example:

  • Loan Amount (§ P §): $10,000
  • Annual Interest Rate: 5% (which means the monthly interest rate § r § is 0.05 / 12 = 0.004167)
  • Loan Term (§ n §): 15 years (which means the total number of payments is 15 * 12 = 180)

Using the formula:

§§ M = \frac{10000 \times 0.004167}{1 - (1 + 0.004167)^{-180}} \approx 79.64 §$

So, your monthly payment would be approximately $79.64.

When to use the Loan Payment Calculator?

  1. Home Loans: Calculate your monthly mortgage payments to understand your budget.

    • Example: Estimating payments for a new home purchase.

  2. Auto Loans: Determine how much you will pay monthly for a car loan.

    • Example: Assessing the affordability of a new vehicle.

  3. Personal Loans: Evaluate monthly payments for personal financing options.

    • Example: Planning for a personal loan for home improvements.

  4. Student Loans: Understand the repayment amounts for educational loans.

    • Example: Calculating monthly payments for student debt.

  5. Debt Consolidation: Analyze the impact of consolidating multiple loans into one.

    • Example: Comparing payments before and after consolidation.

Practical examples

  • Home Purchase: A potential homebuyer can use this calculator to estimate monthly mortgage payments based on different loan amounts and interest rates.
  • Car Financing: An individual looking to finance a vehicle can input various loan terms and rates to find a suitable monthly payment.
  • Budget Planning: A borrower can assess how different loan amounts and terms affect their monthly budget and financial planning.

Use the calculator above to input different values and see how your monthly payment changes dynamically. The results will help you make informed decisions based on your financial situation.