What This Calculator Does
This calculator determines the fixed periodic payment required to fully amortize (pay off) a loan over a specified term at a given interest rate. It is commonly used for mortgages, auto loans, personal loans, and student loans.
Payment Formula (Amortization)
Payment = P × r(1 + r)n / [(1 + r)n − 1]
Where:
P = Loan Amount (Principal)
r = Periodic Interest Rate
n = Total Number of Payments
Key Features
- Payment Frequency: Choose how often you make payments (Monthly, Bi-weekly, Weekly).
- Compounding Frequency: How often interest is calculated and added to the balance.
- Full Amortization Schedule: View every payment with beginning balance, interest, principal, and ending balance. Switch between Monthly and Annual views.
Important Notes
- This assumes a fixed interest rate and fixed payment amount throughout the loan term.
- Early payments or extra payments can significantly reduce the total interest paid.
- Always compare the APR (Annual Percentage Rate) when shopping for loans.