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Rule-of-78s calculator help...
Rule-of-78s loans are declining in use, but should you need to create a schedule for one, use this calculator. You can check out our "Reading Room" for an article about how a Rule-of-78s loan works.
This calculator will solve for any one of four possible unknowns: "Amount of Loan", "Number of Payments" (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 "Number of Payments" and the "Payment Frequency". If the loan is calling for monthly payments and the term is four years, then enter 48 for the "Number of Payments". If the payments are made quarterly and the term is ten years, then enter 40 for the "Number of Payments".
Normally you would set the "Payment Method" to "Arrears" for a loan. This means that the monies are lent on one day and the first payment isn't due until one period after the funds are received.
If the first payment is due on the day the funds are available, then set "Payment Method" to "Advance". This is typical for leases.
Scott says:
Thank you So Much for this Calculator!!!
I have taken a Rule of 78s loan and afterwards I used this calculator to print and show the lender what they were doing to me with the interest. I was able to take advantage of the 7 Day return window with OneMain Financial and saved almost $10,000 in Interest by returning their money and NOT Taking their precomputed interest loan.
This Calculator is the best I’ve found online. And the print function of the Payment Schedule and Loan Summary is amazing.
Thank you so much for this. Really appreciate it! 🙂
Scott
Karl says:
That’s a great story. Thank you for letting me know!