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 are monthly loan payments calculated?

Your monthly loan payments will typically be broken into equal payments over the term of the loan. How you calculate your payments depends on the type of loan. Here are three types of loans you'll run into the most, each of which is calculated differently: Interest-only loans: You don’t pay down any principal in the early years—only interest.

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).

How do loan calculators work?

Loan calculators can help you figure out your monthly payments on different types of loans. These include mortgages, car loans, personal loans, and so on. They can also help you understand how much you can afford to borrow based on your income and other factors. Don't focus entirely on the monthly payment.