Loan Calculator
Calculate monthly payments, total interest, and amortization schedule for your loan. Compare equal payment and equal principal methods.
Fixed monthly payment. Interest portion is higher initially and decreases over time.
📖 How to Use
- Select repayment method (Equal Payment/Equal Principal)
- Enter the loan amount
- Enter the annual interest rate (%)
- Enter the loan term in months
- View monthly payment, total interest, and amortization schedule
✨ Features
- ✓Equal payment (amortized) calculation
- ✓Equal principal calculation
- ✓Monthly amortization schedule table
- ✓Principal/Interest ratio visualization
- ✓Total interest and payment calculation
📐 Formula
Equal Payment: M = P × [r(1+r)^n] / [(1+r)^n - 1]
Equal Principal: M = P/n + (Balance × r)💡 How It Works
- •Equal Payment (Amortization): Same payment each month. Interest portion is high initially, principal portion increases over time.
- •Equal Principal: Same principal each month plus interest on remaining balance. Higher initial payments that decrease.
- •Equal principal method results in less total interest for the same loan terms.
- •Longer loan terms mean lower monthly payments but significantly higher total interest.
- •Example: $100,000 at 4.5% for 30 years: Equal payment ~$507/month, Equal principal starts at ~$650 and decreases.
❓ FAQ
Q. Which repayment method is better?
A. Equal principal saves on total interest but requires higher initial payments. Equal payment offers predictable monthly budgeting. Choose based on your financial situation.
Q. What method is used for mortgages?
A. Most mortgages use equal payment (amortization). Some lenders offer equal principal as an option.
Q. Should I choose a longer loan term?
A. Longer terms mean lower monthly payments but much higher total interest. A $100,000 loan at 4.5%: 20 vs 30 years can mean ~$20,000 more in interest.
Q. Does prepayment reduce interest?
A. Yes, paying extra toward principal reduces remaining interest. However, some loans have prepayment penalties (typically 1-2%).
Q. What is a grace period?
A. A period where you pay only interest without principal repayment. This lowers initial payments but increases total interest paid.