What is the Loan Calculator?
The Loan Calculator is a financial tool that helps users estimate the payments for a loan. By inputting the loan amount, annual interest rate, and loan term, it calculates the estimated monthly payment, the total amount of interest that will be paid over the life of the loan, and the total amount paid (principal + interest).
History of this Feature
Loan amortization calculations have been a fundamental part of banking and finance for a long time, but were historically calculated by hand or with specialized tables. The digital calculator made these complex calculations accessible to everyone. Our Loan Calculator provides a simple, visual interface for this essential financial planning task, allowing users to easily experiment with different loan scenarios to understand the true cost of borrowing.
Who Commonly Uses This Feature?
This tool is commonly used by prospective home buyers estimating mortgage payments, car shoppers comparing loan options, individuals considering a personal loan, and students planning their student loan repayments. It is an essential tool for anyone looking to make an informed decision about taking on debt.
How to Use the Loan Calculator
Estimate your monthly loan payments, total interest, and total payment amount with this simple tool.
- Enter Loan Amount: Input the total amount of money you are borrowing.
- Set Interest Rate: Use the slider to adjust the Annual Interest Rate (APR).
- Define Loan Term: Enter the length of the loan and select whether it's in "Years" or "Months."
- Review Your Summary: The "Payment Summary" will automatically update to show you:
- Monthly Payment: Your estimated payment each month.
- Total Interest Paid: The total amount of interest you will pay over the life of the loan.
- Total Amount Paid: The full amount you will have paid by the end of the loan term (principal + interest).
This tool is great for understanding the true cost of mortgages, car loans, or personal loans.