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6 thoughts on “rule-of-78s-loan-calculator

  1. It is very helpful to be able to change the date format, thank you – would it also be possible to change the financial year format – presently this shows as calendar year but we need financial year July to June. Also, being able to set the commencement date would be beneficial – in this case, the calculator has assumed that the first payment date will be the 1st of June when it will actually be commencing in May.

    • The amortization schedule calculator will allow you to set the loan date and the first payment date. The Rule-of-78s is an option under Amortization Method

      And this is where I get to plug one of the commercial programs. 🙂

      The C-Value! program will let you save a schedule and let you change the start of the fiscal year. Same for SolveIT!. They are $19.95 and $24.95 respectively.

  2. Banks applying this rule are increasing their income in the beginning while constantly reducing lesser to lesser to the following periods. This will impact profitability uniformity to of the loan amount, i.e. good harvest in the start and low return in subsequent years.

  3. The above number looks like constant instalment

  4. How do I show how someone can take years off their mortgage by paying their payment 5 days early. How much will they save. I can’t adjust dates of payments?

    • You wouldn’t be able to do that with this calculator. You could use this one, the Ultimate Financial Calculator as it will let you set any date for any payment.

      Interesting that you brought this idea up. I was thinking about this exact thing last week and in fact I was going to do the calculation and perhaps write up a brief post for The Reading Room. The one thing I realized however is this – say the payments are due on the 10th of each month. It’s not enough to pay every payment on the 5th of the month. If you do that, then only the first payment is 5 days early. The subsequent payment still have a full period of interest that will have accrued and there won’t be any savings, even though you may have paid the lender early.

      I would be interested to know what you discover.

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