# Loan Calculator

Since you may have happened upon this loan calculator to calculate a monthly payment, I'll cut to the chase. You'll only need to enter three numbers, and __you can leave the other dozen or so options untouched__.

Here's all you need to do.

- Click clear and enter values for:
- Loan Amount
- Number of Payments
- Annual Interest Rate

- Leave Loan Payment Amount set to 0.
- Click either
**"Calc"**or**"Payment Schedule."**

There you have it. Now you have what you need.

#### Info...

Click, copy, paste this URL to save the inputs for yourself or to share with others.

This custom URL updates when you click the "Calc", "Clear" or "Schedule" buttons. Paste it into a browser's address bar to reload.

## About Dates & Calculations

VERY IMPORTANT - You __must__ enter a 0 if you want a value calculated. Some users have been frustrated by this. They want to know why the calculator does not just recalculate a payment if they have changed the loan amount, interest rate or term.

This is because we want the calculator to be able to create an amortization schedule using whatever parameters you want to use. This behavior is a feature! After all, there is no such thing as a "correct" loan payment. The payment amount is correct as long as both the lender and debtor agree to it!

About the loan origination date (start date) and first payment due date - This calculator now allows irregular length first periods. That is, the calculator calculates the exact amount of interest due even when the initial period is shorter or longer than the other scheduled periods. __This will result in payment amounts as well as interest charges that do not match other calculators__. If you want to match other calculators then set the "Loan Date" and "1st Payment Date" so that the time between them equals one full period as set in "Payment Frequency". Example: If the "Loan Date" is May 15th and the "Payment Frequency" is "Monthly," then the "1st Payment Date" should be set to June 15th, that is __IF__ you want a conventional interest calculation. See amortization with dates — first period interest & year-end totals for details about the long and short period interest options.

Of course, you can always leave the dates set as they are when the calculator loads.

## Much More Than a Payment Calculator

Since the calculator will solve for multiple unknowns, it can easily be used to answer the following questions:

- How much can I borrow?
- What would my payment be?
- What is the lending rate?
- How long will it take to pay off my loan?
- What date is my loan paid off?
- What is the impact of making extra payments?

## Loan Calculator with Extra Payments or Lump Sum Payment

If, for example, your loan payment is $550 a month, but you could afford to pay more, say $625 a month, you could go ahead and pay the lender $625.

Why would you want to do that`?

If you made an additional payment each month, you would be prepaying principal - frequently called making extra payments (though there is nothing "extra" about it because the debtor owes the money). When a borrower prepays loan principal, they save interest charges. Loan interest gets calculated each period on the unpaid balance. **The extra payment lowers the balance as of the next interest calculation and for all future interest calculations**. The result is, you'll potentially save a lot in interest charges because the interest due gets calculated on a lower balance.

How much interest can I save?

That's what this calculator will tell you.

On the options tab, enter an "Extra Payment Amount."

With this calculator, the extra payments can start on any date and be for any frequency. Perhaps you pay the loan monthly, and you receive regular income that is paid to you quarterly (a stock dividend for example) that you want to use for prepaying principal. The calculator gives you the ability to enter extra payments on a schedule that suits you.

Perhaps you anticipate getting a year-end bonus. The **loan calculator will calculate the impact of making a single lump sum extra payment**. Just pick a payment date and enter 1 for "number of Extra Pmts."

You'll **save even more in interest charges if you make multiple extra payments**. You can enter a specific number or if you enter "Unknown" for the "number of extra pmts", the calculator will create a payment schedule, adding the extra payment amount as indicated until the loan is paid-in-full.

Another detail about additional payments. Notice if you make the extra payments on a date other than the scheduled periodic payment date, the layout of the amortization schedule changes. You'll see a few new columns. When making an extra payment, **the borrower will want the entire amount used to reduce the principal balance**. That is what this calculator will do. The additional columns make this clear by tracking the accrued interest in the interest balance column, and the calculator reduces the principal balance by the extra payment amount. The lender collects the accured interest with the next scheduled payment.

If you are a borrower, you can use this calculator to confirm that the lender is allocating the payments in this manner. I believe this is the only free loan calculator with extra payment support on the web that either allow an extra payment on a different date than the regular loan payment schedule or that correctly applies the prepayment 100% to the principal balance.

### Wrapping Up

On a more general note, we have been discussing details about loans, some structured with unusual features, over several decades. At this point, we believe our software calculators can create a schedule for any **structured settlement loan** that exists. If you have a loan with special requirements, please ask.

## Loan Calculator Help...

This calculator will solve for any one of four possible unknowns: "Amount of Loan", "Total Scheduled Periods" (term), "Annual Interest Rate" or the "Periodic Payment".

Enter a '0' (zero) for one unknown value.

The term (duration) of the loan is a function of the "Total Scheduled Periods" and the "Payment Frequency". If the loan is calling for monthly payments and the term is four years, then enter 48 for the "Total Scheduled Periods". If the payments are made quarterly and the term is ten years, then enter 40 for the "Total Scheduled Periods".

The "Amortization Method" should be set to "Normal" (level payments) unless you have a specific reason to set it to another method. &Fixed Principal" causes the amount allocated to principal to be the same each period which result in decreasing payments.

If the terms of the loan call for a 0% interest rate, then the "Amortization Method" must be set to "No Interest," otherwise entering a zero for "Annual Interest Rate?" will cause the calculator to calculate an interest rate. Selecting "No Interest," also lets the user set the payment amount to "0" to tell the calculator to calculate it.

When the first period, the period of time between the "loan date" and the "first payment date" is longer than one full period, there will be interest due for the "extra days". This is known as "odd day interest." Example: if the "loan date" is March 24 and the "first payment date" is May 1, then there are 8 odd days of interest - March 24th to April 1st. How the odd day interest is calculated and collected is controlled with the "Long Period Options." By default, the odd days interest is shown being paid on the loan date.

Conversely, if the time between the "loan date" and "first payment date" is less than the payment period set, then the first period is said to be a "short initial period" and the first payment will be reduced due to less interest being owed. How the payment amount and interest is calculated for a short period is determined by the "Short Period Options."

## Ibrah says:

How does this loan calculator work ?

If i took a loan of $ 200,000 paid on monthly basis at a rate of 10% !

i.e Interest per month 0.10*200,000 = 20,000/mo.

but the calculator shows monthly interest contribution is $ 15,000.

How does this calculator work ?

## Karl says:

The calculator requires you to enter an annual interest rate. Is the interest rate for this loan really 10% per month (very roughly about 120% per year)?

Also, the dates you enter and compounding frequency are important.

## Ibrah says:

Yes, 120% per year.

Then why when calculating manually, the monthly interest is different ?

That’s 0.10*200,000 = 20,000per month ( manually ).

By calculator, it amounts to 15,000 monthly.

## Karl says:

When the loan balance equals 200,000 and the loan date is May 1 and the first payment date is June 1, with a 120% annual interest rate, the first interest payment using this calculator is 20,000.

## Grant Kincaid says:

Thank you! I have been looking for a complex Bi-weekly calculator that would tell me how much to pay to pay off a loan by giving a set amount of time (or bi-weekly payments). Many other calculators what to know my payment, loan dates, extra payment, blah blah blah.

Now I know how much to pay Bi-weekly to have my car loan paid off by January 2020!! This is perfect. Already bookmarked!

## Karl says:

Great Grant! Glad you found it useful. Good luck in getting that car loan paid off.

## Bobby says:

I’m trying to find the difference between a typical mortgage loan paid out monthly versus paid out weekly. I can’t enter number of payments as 1560 (52×30). Am I missing a step or something?