Finance
Loan Calculator
Calculate payment schedules, interest, and payoff dates for personal, student, or business loans.
Inputs
Results
Periodic Payment
$0.00
Total Principal Paid
$0.00
Total Interest Paid
$0.00
Total Cumulative Cost
$0.00
Number of Payments
0
How It Works
This tool calculates payments for standard amortizing loans. It amortizes the debt over a fixed series of payments, with the interest part of each payment calculated as the periodic interest rate multiplied by the remaining principal balance. The calculator handles alternative frequencies like weekly or bi-weekly by adjusting the interest compounding periods and the total number of amortization increments accordingly.
Formula Used
Periodic Payment = P × [r(1+r)^n] / [(1+r)^n − 1]
This standard amortizing formula computes the fixed payment required per period. The periodic rate r and total periods n are adjusted to match the payment frequency, such as dividing the annual rate by 12 for monthly or by 26 for bi-weekly payments.
Worked Example
Here is a step-by-step example of how these values are calculated:
Loan Amount
$20,000
Interest Rate
7% (Annual)
Term
5 Years
Frequency
Monthly
Result: Monthly Payment: $396.02. Total Principal: $20,000. Total Interest: $3,761.44. Total Cost: $23,761.44.
Frequently Asked Questions
What is an amortizing loan?
An amortizing loan is a loan structured to be paid off completely over a set term through equal periodic payments. In the beginning, payments cover mostly interest, but over time, they shift to paying down the principal.
How does bi-weekly payment benefit me?
Making bi-weekly payments splits your monthly payment in half and schedules it every two weeks. This results in 26 half-payments (equivalent to 13 full payments a year), which pays down the principal faster and saves interest.