Calculate your monthly payment, total interest, and amortization schedule for any type of loan.
The monthly payment is calculated using the standard amortization formula, which is a fundamental equation in finance:
What is amortization?
Amortization is the process of paying off a debt over time in regular installments. Each payment consists of both principal and interest. In the beginning, a larger portion of your payment goes toward interest. Over time, more of your payment goes toward paying down the principal balance.
How can I lower my monthly loan payment?
You can lower your monthly payment by: 1) Extending the loan term (e.g., from 5 years to 7 years), which means you'll pay more interest over the life of the loan. 2) Finding a loan with a lower interest rate. 3) Borrowing a smaller amount.
What is the difference between APR and interest rate?
The Interest Rate is the cost of borrowing the principal loan amount. The Annual Percentage Rate (APR) is a broader measure of the cost of a loan. It includes the interest rate plus other loan-related fees, such as origination fees or closing costs. The APR gives you a more complete picture of the total cost of borrowing.