# 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."

## Monte Friedman says:

Karl,

That should have been,

“Even though the Total Dollars Paid over a 365.25 Day (1 Year) Period are the same.”

## Karl says:

Hi Monte, have you tried the calculator? It will calculate this for you and you should be able to compare the schedules.

That’s a great thing about calculators — they can be used as a teaching tool.

## John Dmochowski says:

We have a small corporation and the stockholders make loans to the company. I would like a program that is on a computer that calculates monthly balances, instead of our paper and pencil method. Does this financial calculator do that?

## Karl says:

I don’t think this is the calculator you’ll want to use. It will calculate a loan balance after a scheduled payment (see the calculator’s amortization schedule), but it assumes the payments are made as scheduled.

I recommend looking at the loan payoff calculator on this site. It’s designed to calculate payments on the actual date paid. Check it out. If you have any questions, just ask.

## Steven Peters says:

I am confused, I have a loan in which the payor makes monthly payments and sporadic and variable amounts of principal payments. I used to use one of your calculators for this. It had a screen in which I could input the date and amount of principal payments and it would recalculate the loan and amortization schedule. Cannot find the calculator, have you discontinued it?

## Karl says:

I think you are looking for the loan payoff calculator.

## Steven Peters says:

Thanks, preferred your version that allowed you to enter extra principal payments on a separate page with date and amounts. Thanks again.

## Karl says:

Hi Steven, the recommended calculator allow you to enter extra payments. I assume you saw that. However, I don’t recall ever having a calculator where the extra payments were shown on a separate page. No calculator has been dropped from this site either. So perhaps the calculator you are thinking of was on another website?

## Tan says:

Hi Karl,

Thanks for your plugin. This is awesome !

How i can download lastest Loan Calc Plugin ? WordPress version is 1.3

And how i can change Currency decimal ? For example, to display $32,500 instead of $32,500.00

Thanks again.

## Karl says:

Hi Tan,

The download link is located on the right side of this page.

The calculator, however, will always show two decimal digits.

## Angel Mortenson says:

Hi Karl,

How do I calculate a land sales contract with the following?

30 year amortization, 5 year balloon, 6% interest, loan amt $245,000, monthly pmt of $1000.00 which started on 12/01/2017 and one additional pmt of $5000.00 on 03/2019 ???

I have tried several ways without any success…

Thanks,

Angel

## Karl says:

First, a couple of things. Since you are stating the payment amount ($1,000) 30 year amortization is not relevant to this calculation.

Secondly, the $1,000 a month does not cover the interest due on a $245,000 loan @ 6% – so you have what is known as negative amortization. That is, the balance, rather than being paid down is growing.

Those things aside, you can set the calculator as follows and get an accurate amortization schedule.

Options tab:

## Susan Laderoute says:

I am trying to find a schedule that I can input two payment amounts but I don’t have the interest rate only the payment amounts and the loan amount. I tried the loan calculator but it doesn’t allow for multiple payments (unless I am missing something).

## Karl says:

I think I understand. You want to solve for an unknown interest rate, and (this is what I’m not so sure about) there are only 2 payments and they are for different amounts, or there are two series of payments, and each series if for a different amount?

Either way, there is a calculator on this site that will solve for the rate for you when there are different payment amount. Please try the Ultimate Financial Calculator. Scroll down the page for tutorials. You can have 2 series of payments, each series for different amounts.

## Susan Laderoute says:

Thanks Karl. The first payment amount is for 6 periods and then the 2nd payment amount is for 53 periods. I have tried that one and have entered the loan and the different payments but it won’t let me not put a value in the interest rate

## Karl says:

For unknown values (including "Initial Interest Rate") enter "U" for unknown.

## Ryan says:

Hello,

Thank you for your calculator. Unfortunately it has flawed math. Check this out:

$12K loan amount, 5.75% annual interest rate, quarterly payment frequency and compounding quarterly. Amortization method normal

Total interest for:

4 payments: $448.21

8 payments: $669.41

12 payments: $531.37

Notice how the interest goes up for a 2 year (8 payments) and down for a 3 year (12 payments) loan. Interest payments should go up for a longer term!

Thank you.

## Karl says:

You’re welcome.

You’re information is incomplete. What is the loan date and the first payment date for each case? How are your long and short period options set.

The calculator is very sensitive to all option settings. Not saying it is not possible, but I doubt at this stage, after being used for years, that there is a calculation bug. I myself run 1,400 automated tests on it when making a change.

## Ryan says:

Hello Karl, glad to hear you automate your testing. All other fields were default, so you can load the page like a visitor and put in the inputs I provided. For your question however, loan date, 1/1/2020. First payment due, 2/1/2020, long period ‘with origination’, short period ‘reduce first’, fiscal year end, December. Hope that helps

## Karl says:

Hi Ryan. Thanks for the details. I’m not getting the results you mentioned earlier. I don’t see where you mentioned the payment amount – so I’m assuming that you are asking the calculator to calculate payment by entering a 0 each time.

When I do that, I get the following total interest:

4 payments, $3,108.58 quarterly payment amount, $320.42 total interest.

8 payments, $1,598.65 quarterly payment amount, $675.27 total interest.

12 payments, $1,095.88 quarterly payment amount, $1,036.67 total interest.

When you first posted, I read the comment quickly, and I was thinking that the payment frequency was also changing. You clearly stated that payment and compounding are quarterly. Had they been changing though, the short/long period options would have been more important.

But anyway, I see that 12 payments requires that more interest than 8 or 4 payments.

When the payment amount is left the same between 8 and 12 payments, then the loan is paid off prior to 12 payments and if you look at the schedule the loan balance is negative and the cash flow starts to earn interest. 🙂 a bit strange, I admit. But what should happen is, the user should allow the calculator to calculate at least one unknown – usually number of payments if user provides a payment amount.

## Ryan says:

I see now. The calculator is working, I just didn’t have a $0 for the payment amount. So when I hit calc the first time, it filled in the payment amount. Then changing the number of payments then causes it to calculate “incorrectly”.

I design web app UIs for a living, I would recommend changing something up so that users make proper calculations. I think many users would want to change the number of payments to see what that would change in the payment amount, but I wouldn’t expect to have to zero out the payment amount value each time to recalculate. Hope that feedback helps. Otherwise now that I know how to work it, I can see how it calculates properly!

## Karl says:

Thanks for your feedback, Ryan.

I understand your point. However, I want the calculator to support "one-off" loans. Meaning, what if someone wants to borrow $50,000 for 72 months @ 4.5%? The "normal"e payment is about $793 for this scenario. But, what if the borrower says I’ll pay $1,000 a month? By letting the user provide all inputs, the calculator will create an accurate payment schedule. If I forced a recalculation of any one of the inputs, then the user would not get what they want.

In such cases, you might say, well adjust the number of payments. I could do that, but then what if the borrower said I want to pay $1,000 a month and I’ll pay the balance in 24 months? By letting the user enter 24 months, the calculator will handle this scenario as well (that is, there will be a large final payment or as it is known, a balloon payment).

So, I’m not sure how I can handle an automatic recalculation of one of the user inputs and still give users full control. The interface does say to enter a "0" for one unknown. Thus it implies that if a user enters all 4, the calculator will use the values provided. Perhaps, I should not imply it though?

I have also thought of adding a message: "There are no unknown values. Did you want the calculator to calculate the term?" Or something along this order. But then I thought that users would get annoyed with the message once they understood how the calculator functioned.

I think it’s the classic trade-off – ease-of-use vs features.

## Margaret Lockyear says:

Hello. I really appreciate your calculators and have used them many times in the past.

For another one I am working on now, for obtaining the repayment schedule using the loan calculator, I know the loan amount, and the weekly repayment amount, but not the interest rate, only the total interest which will be charged over the life of the loan, 78 weeks. How best to do this?

Thank you in anticipation

Kind regards

## Karl says:

Thank you! Glad you find them useful.

I think the first thing you should do is confirm the math. Does 78 times the payment amount minus the loan amount equal the total interest you expect? That is:

(78 x pmt) – loan amount = total interest

I only mention this, because usually people don’t know the total interest, and I think since you do, that’s worth checking.

But to answer your question, enter the 3 values, loan amount, number of payment and payment amount and enter 0 for annual interest rate.

Click "Calc" and the calculator will calculate the rate for your.

Hope this helps.

## Margaret Lockyear says:

Perfect, thank you!

## James says:

I have several student loans with different interest rates and balances. I want to compare the repayment type depending on which option I choose: smallest balance first, highest interest first, consolidate on lover balance and pay additional etc. Could you upgrade your calculator to include the most common options and the ones I just mention?

## Karl says:

The first thing I think you should do is check out this debt reduction calculator. This calculator is specifically designed to work with multiple loans at the same time and already it has the options you mentioned.

Let me know if you have any questions.

## Ryan says:

Karl, thanks for responding. I don’t have any great ideas on this (having lots of flexibility), but I do like instantly updating calculators. Perhaps a function similar to a radio button on what to calculate for would help? Anyway, thanks for clearing up my confusion on how the calc worked.

## Karl says:

Hi Ryan. It’s a tough design problem (at least for me). I’ve thought of checkboxes (not radio button because I want the option of having none checked – don’t know if I can have no radio buttons selected in a group?), but that will add to the width I guess and thus make it more crowded on mobile devices. I’ve thought of an option on the options tab – "Force recalc of last unknown?" Yes/No. But don’t know what default to use for the option. A lot of people may not find it, and if they found it, they might not know why there’s a choice. People don’t want to read. After all, all of this is explained in the text on this page! And we see how people can miss that. 🙂

## John Paul says:

i want a calculator that can do this: see example below

e.g Loan is 500,000 and tenor is 5 months at 5% flat

Monthly principal will be 500,000/5 = 100,000

Monthly interest will be 500,000×0.05 = 25,000

Monthly repayment 100,000 + 25,000 =125,000

## Karl says:

What you want is a "Fixed Principal" loan. The calculator supports that. See under "Amortization Method" the fixed principal setting.

The monthly interest will actually vary (it will decrease) as the principal is paid down. The amount will decline.

The 5% rate, that’s not an annual rate? Interest is really 5% a month? If so, you’ll need to convert it to an annual rate and enter the converted rate into the calculator.

## Dean says:

Hi Karl,

What is the difference between the normal amortization method and the interest only amortization method options on the calculator? Thanks in advance for the clarity.

## Karl says:

Hello Dean, with the normal amortization method part of each payment is applied to principal reduction. When a user selects interest only, 100% of the payment goes to pay the current period’s interest. There is no principal reduction.

Now, if you tried the calculator and didn’t see this difference, there is one caveat. (And I’m updating the text on the page this weekend to explain this.) You must always enter a 0 so the payment recalculates. If you did the normal calculation and then changed amortization to interest only and did not change the payment back to 0, the calculator will use the payment amount provided – which will be more than the interest-only payment.

The calculator works this way so that users can use mutually agreed on payment amounts and not a payment amount that the calculator calculates.

## Dean says:

For the normal method, what percentage of the payment goes towards the principal vs the interest? How is that determined?

## Karl says:

I don’t get involved in discussing equations. That’s a bottomless pit.

But the way (normal) amortization works, the interest due is calculated and added to the principal balance. Then the payment is deducted.