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Loan Calculator

Inputs

Uses nominal APR with selected compounding. For guidance only.

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Payment EveryMonth
Payment Amount—
Total of Payments / Face Value—
Total Interest—

Scroll to the end to see the final line. Up to 360 rows shown.

Table of Contents

🔹 How to Use the Loan Calculator

The loan calculator is designed to be simple and practical. You can quickly estimate monthly payments, total interest costs, or the present value of a bond by filling in a few fields. Here’s how to get started:

  • Choose a Loan Type: Select between Amortized, Deferred, or Bond PV using the tabs at the top.
  • Enter the Loan Amount: The principal (initial amount borrowed or invested).
  • Set the Term: Provide the loan length in years and/or months.
  • Input the Interest Rate: Enter the annual percentage rate (APR).
  • Select Compounding: Choose how often interest compounds (monthly, quarterly, annually, or daily).
  • Optional Fields: For amortized loans, select payment frequency. For bonds, enter a face value if different from the loan amount.
  • Pick a Currency: Choose USD, EUR, or GBP for automatic formatting.
  • Click Calculate: Instantly see payments, total cost, interest, and a schedule you can scroll through.

By adjusting these inputs, you can compare scenarios side by side — for example, shorter loan terms with higher monthly payments versus longer terms with more interest cost.

🔹 How the Loan Calculator Works

The calculator supports three lending models. Use the formulas below to understand the numbers you see in the results and schedules.

Type What it solves Formula Symbols
Amortized Fixed payment PMT per period PMT = P·r / (1 − (1+r)−n) P = principal, r = periodic rate, n = # of payments
Deferred (Lump Sum) Balance at maturity Future Value = P·(1 + i)N i = rate per compounding, N = # of compounding periods
Bond PV (Zero-Coupon) Present value for a face value F PV = F / (1 + i)N F = face value due at maturity
Balance declines over time in an amortized loan; area under curve shows interest share early on. Balance Time Balance falls faster early, then flattens
Illustration: amortized balance typically drops quickly at first, then more slowly as interest portion shrinks.

🔹 Worked Example (defaults)

Suppose P = 100,000, term 10 years, APR 6%, monthly compounding/payments.

  • Periodic rate: r = 0.06 / 12 = 0.005
  • Payments: n = 10 × 12 = 120

PMT = 100000 × 0.005 / (1 − (1.005)−120) ≈ €1,110 per month

Total of payments ≈ €133,200 and total interest ≈ €33,200.

Tip: If you want to explore pure growth without payments, try our Compound Interest Calculator — it uses the same compounding logic as the deferred loan and bond PV modes.

🔹 Benefits of Using the Loan Calculator

Whether you’re applying for a mortgage, planning a car loan, or evaluating a bond purchase, the loan calculator helps you make clear financial comparisons. Here are some of the main advantages:

  • Quick estimates: Instantly see payment amounts, total interest, and maturity values without manual math.
  • Scenario testing: Change interest rates, terms, or compounding frequency to compare different offers.
  • Transparency: Breaks down principal vs. interest so you know where your money is going.
  • Supports multiple loan types: Handles amortized, deferred, and bond/zero-coupon structures in one tool.
  • Financial planning: Helps you plan budgets and repayment strategies before committing to a loan.
Example: Before choosing between a 15-year or 30-year mortgage, you can use the calculator to see that shorter terms cost less in interest overall, but require higher monthly payments.

🔹 Real-Life Applications

Use this calculator to plan and compare common borrowing scenarios:

Common use cases: mortgages, car loans, and student loans.
Scenario Model to use What to compare
Mortgage (fixed-rate) Amortized Monthly payment vs. term length; total interest across 15y vs 30y
Auto loan Amortized APR from dealers vs. banks; effect of deposit/down payment
Student loan with payment holiday Deferred Balance growth during deferment; total due at maturity or repayment start
Zero-coupon bond (buy today, redeem at face) Bond PV Present value vs. yield; time to target return
Tip: If your loan is in another currency, convert the figures before comparing offers using our Currency Calculator.

🔹 Factors That Affect Loan Calculations

Loan payments and interest depend on several key variables. Understanding these will help you see why two similar loans can have very different costs.

1. Principal Amount

The higher the amount borrowed, the larger the payments and total interest. A small change in the loan size can significantly impact affordability.

2. Interest Rate (APR)

Even a 1% difference in APR can mean thousands of extra interest over the life of a long-term loan. Comparing APRs is critical when shopping around.

3. Loan Term

Shorter terms have higher periodic payments but reduce the total interest paid. Longer terms make payments more manageable but increase interest costs.

4. Compounding Frequency

Monthly vs. annual compounding changes how quickly interest grows. More frequent compounding increases the effective interest paid.

5. Payment Frequency

Monthly payments are standard, but bi-weekly or annual payments alter the pace at which principal is reduced, changing the interest portion over time.

Each of these factors interacts with the others. For example, a lower interest rate can offset the cost of a longer term, or a larger down payment can reduce the total loan size and make monthly payments more affordable.

🔹 Amortization vs. Simple Interest

Loans are commonly structured as amortized (fixed periodic payments that cover interest and reduce principal) or as simple-interest agreements where interest is computed on the original principal only, without compounding.

Feature Amortized Loan Simple-Interest Loan
How payments work Fixed payment includes interest + principal; balance declines each period Interest is calculated on original principal; repayment may be interest-only until principal is due
Interest calculation Interest each period = current balance × periodic rate Interest = principal × rate × time (no compounding)
Total cost over time Lower than simple interest for same nominal rate/term when paid down regularly Can be higher if principal is not reduced during the term
Best for Mortgages, auto loans, most consumer loans Short-term notes, some personal or commercial agreements

🔹 Formulas

  • Amortized payment: PMT = P·r / (1 − (1+r)−n)
  • Simple interest (no compounding): I = P·R·T,   Total Due = P + I

🔹 Quick Example

Compare a €10,000, 6% annual rate, 1-year term:

Model Key steps Result
Amortized (monthly) r = 0.06/12 = 0.005, n = 12 → PMT ≈ 10,000×0.005 / (1 − 1.005−12) Monthly ≈ €860.66; Total ≈ €10,327.92; Interest ≈ €327.92
Simple interest I = 10,000 × 0.06 × 1 = €600 Total Due = €10,600 at year-end (if interest paid at maturity)

In this specific 1-year case, a simple-interest loan repaid in a single lump sum is costlier because principal isn’t reduced during the year. With longer terms and regular payments, amortization usually keeps total interest more manageable.

Bars showing amortized total ~€10,328 vs simple total €10,600 on €10,000 at 6% for 1 year. €10k €10.3k €10.6k Amortized ~€10,328 Simple €10,600
Amortized loans lower interest by reducing principal each month; simple-interest loans can cost more if principal is paid at the end.
Tip: If your current loan computes interest daily and allows extra payments, making small additional principal payments early in the term can noticeably reduce the total interest.

🔹 Advantages of Early Repayment

Paying off your loan faster than scheduled can save you a significant amount of interest, especially with long-term amortized loans. Even small extra payments toward the principal make a difference over time.

Scenario Monthly Payment Total Paid Total Interest
Standard 30-year mortgage (€200,000 at 5%) €1,073 €386,500 €186,500
+ €100 extra per month €1,173 €353,100 €153,100

As shown above, paying just €100 extra per month saves more than €33,000 in interest and shortens the loan term by several years.

Tip: Before making early repayments, check if your lender charges prepayment penalties. Some institutions limit extra payments or apply fees for paying off too quickly.

For more detailed projections, you can also try our Time Card Calculator to compare work-hour income against planned loan payments and see how extra earnings could reduce your debt faster.

🔹 Limitations & Assumptions

This calculator provides fast estimates under standard assumptions. Real-world loan agreements can differ due to lender policies, fees, and legal terms. Review the following before relying on results.

What the tool assumes What may differ in reality
Constant APR and compounding across the whole term Variable/teaser rates, step-up/step-down interest, index-linked rates
No fees unless you add them into the principal manually Origination fees, processing fees, insurance, taxes, closing costs
Exact payment timing (e.g., monthly) and on-time payments Late payments, grace periods, odd first/last periods, payment holidays
No prepayment penalties and no partial prepayments modeled Prepayment fees, caps on extra payments, lock-in periods
Simple amortization or pure compounding (deferred/bond modes) Interest-only phases, balloon payments, mixed schedules
  • Currency/locale formatting: Output is formatted for readability; it does not fetch FX rates or inflation adjustments.
  • Rounding: Payments are rounded to cents; lender systems can round differently per period or at payoff.
  • Taxes & insurance: Property tax, mortgage insurance, or servicing charges are not included unless you add them to the principal or account for them separately.
  • Edge cases: Extremely short terms, zero/near-zero rates, or daily compounding with non-integer periods may display small rounding differences.
Disclaimer: This tool is for educational planning only and does not constitute financial advice. Always verify the lender’s official disclosure and amortization schedule before making decisions.

🔹 Frequently Asked Questions

▼ How is the monthly payment calculated for an amortized loan?
We use the standard formula PMT = P·r / (1 − (1+r)−n), where P is principal, r is the periodic interest rate (APR divided by payment frequency), and n is the total number of payments. Each payment includes interest for the period and the rest reduces the principal.
▼ What’s the difference between APR and APY?
APR is the nominal annual rate used to compute periodic payments and interest. APY (effective annual rate) reflects compounding within the year. Our calculator uses APR and the compounding/payment frequency you choose to produce results.
▼ How does compounding frequency affect results?
More frequent compounding (e.g., daily vs. monthly) increases the effective cost of borrowing because interest is added to the balance more often. Deferred and bond PV modes rely directly on the compounding frequency to grow the balance (or discount a future face value).
▼ Can I model extra payments or early repayment?
This version estimates standard schedules. To reflect extra principal payments, reduce the term, or re-run the calculator with a lower principal after your intended prepayment. (We’ll add a dedicated “extra payment” input in a future update.)
▼ Does the calculator include fees, insurance, or taxes?
No. Results exclude lender fees, insurance, and taxes. If you want fees reflected in totals, you can add them to the principal amount or factor them separately in your budget.
▼ What’s a deferred (lump-sum) loan schedule?
In a deferred loan, interest accrues and is added to the balance during the term. No payments are made until maturity, when a single payment clears the balance. The schedule shows the growing balance each period and the final payoff amount.
▼ How does the Bond PV mode work?
Bond PV (zero-coupon) discounts a future face value F to today using PV = F / (1+i)N, where i is the rate per compounding period and N is the number of compounding periods. The schedule shows accretion (growth) of PV up to the face value at maturity.
▼ Why do my totals differ from my lender’s disclosure?
Lenders may use different rounding rules, treat odd first/last periods, include escrow items, or assess fees. They might also quote variable or teaser rates. Use the calculator for planning and compare with the official disclosure.
▼ Can I change currency?
Yes. Use the currency buttons (USD/EUR/GBP) in the calculator. Values are formatted only; for foreign-exchange conversions, try our Currency Calculator.

🔹 References & Sources

The following references were used to compile formulas, definitions, and examples for this loan calculator:

Source Details
Investopedia – Mortgage Calculator Explains amortization schedules, formulas, and repayment examples.
The Balance – Loan Calculator Provides practical guidance on using loan calculators for different loan types.
U.S. SEC – Investor Resources Bond and present value basics relevant to the bond PV mode.
Calculator.net – Loan Calculator Main competitor reference for layout, structure, and comparison examples.
Investor.gov – Compound Interest Calculator Referenced for deferred loan and compounding growth calculations.