Loan Calculator

With the help of our handy Loan Calculator tool, you can easily find the monthly payment amount for your vehicle/property loan details in seconds. Provide your total loan amount, interest rate and the number of months as inputs and press the calculate button to get the monthly payment value as early as possible.

Choose a Calculation
Loan Amount ($):
Interest Rate(%):
Number of Months:
Monthly Payment ($):

Simple Loan Calculator: People who are struggling to know the total loan amount and monthly payment amount can read this complete page. This Loan Calculator will take the required details and provides the unknown values along with explanation in just one click. Also, find the loan calculation formula, steps to find the monthly payment amount for given interest rate of car loan from this guide. Check the problems that helps to solve real time home loan payment questions.

How to Calculate Loan?

In the following sections you can get the step by step process to find loan. Go through the below segments and follow them.

  • Get the total loan amount, interest rate per month and number of months details.
  • Substitute all these values in the loan formula.
  • Solve the equation to get the monthly payment value.

Loan Payment Calculations

Before checking the loan formulas, have a look at the terminology used in the loan process.

  • Loan Amount: It is the original principal on a new loan or principal remaining on the old loan.
  • Monthly Payment: It is the amount to be paid towards the loan each month before the due date.
  • Number of months: The total number of payments needed to repay the loan.
  • Interest Rate: The annual nominal rate or stated rate of the loan.
  • Compounding: In general, interest will be compounded monthly as per the payments.

When you take the loan in the bank, you must pay the loan amount along with interest by making regular payments. So, for the loan calculations, we use the Present Value of an Ordinary Annuity formula.

Loan Amount PV = (PMT/i)[1 - 1/(1+i)n]

Other Loan Calculations:

Monthly Payment Amount PMT = (PVi(1+i)n]/(1+i)n-1)

Number of months n = [ln[(PMT/i)/((PMT/i)-PV)]/ln(1+i)

Interest rates can be calculated using the Newton-Raphson method.

Here,

PV is the loan amount

PMT is the monthly payment

i is the interest rate per month in decimal form

n is the number of months

Example:

Find the loan amount? If the interest rate is 5%, the monthly payment is $1500 and the number of months is 32.

Solution:

Given that,

Number of months n = 32

Monthly payment PMT = $1500

Interest rate i = 5% = 0.05/12 = 0.004

Loan amount formula is PV = (PMT/i)[1 - (1/(1+i)n)]

PV = (1500/0.004)[1 - (1/(1+0.004)32]

= 44,850.32

Therefore, the loan amount is $44,850.32.

Arithmetic Calculators contains a comprehensive array of calculators designed for people with any level of mathematical knowledge to solve various questions effortlessly.

FAQ's on Personal Loan Calculator

1. How do banks calculate loans?

The banks loan calculation process is given here:

  • Divide the interest rate by the number of payments in that year.
  • Multiply the result by the remaining loan balance to know how much need to pay as interest in that month.
  • Subtract interest from fixed monthly payments to check the amount of principal that should be paid in the first month.
  • Repeat the process with the new remaining loan balance.

2. What is the loan balance formula?

The loan balance formula is PV = (PMT/i)[1 - 1/(1+i)n]


3. Which is the best tool to calculate loans?

This Loan Calculator is a free tool that finds the interest rate, monthly loan payment values within no time.


4. What are the factors that can affect how much interest you pay?

The multiple factors that can affect the amount of interest you pay for financing are loan amount, interest rate, loan term, repayment schedule, and repayment amount.