Here's how you would calculate interest payments on a loan: Divide the interest rate you'll be charged by the amount of payments you'll make each year, normally 12 months, and multiply that number by the initial balance of your loan, which should start with the total amount you borrowed. Bankrate's loan payment calculator breaks down your principal balance by month and applies the interest rate you provide. Because this is a simple loan payment calculator, we cover amortization behind the scenes. If you prefer a loan payment calculator that delves into detailed details (such as amortization), use our more robust calculator.
Not only does this help you calculate what you can afford for a loan, but it also makes it easy to compare lenders to find the lowest monthly payment. Payments on fully amortized fixed-rate loans are established using repayment tables and are provided by the lender at the beginning of the loan. The word loan probably refers to this type in everyday conversations, not to the type that appears in the second or third calculation. An amortizable loan is an installment loan and you must make regular payments over a specified period.
An interest-only loan is a type of loan where you only make payments to cover interest for a certain period of time. To use the Forbes Advisor personal loan calculator, enter the loan amount, the annual interest rate and the repayment period in months or years. As with the HELOC calculator, you'll be able to see your current LTV ratio and the amount you could borrow against the cumulative value of your home. Whether your loan lasts just two years or extends into the next 15, you should make a conscious effort to ensure that you make your monthly payments.
When appropriate, also enter the trade-in value of your current vehicle or the initial payment you plan to make. Depending on the auto loan calculator you use, you can also generate annual and monthly repayment schedules. Calculating the monthly payments on an amortizable loan requires a slightly different formula, which is provided in the table below. Use the Compound Interest Calculator for more information or to perform calculations related to compound interest.