Calculator Use
Use this loan calculator for a simple calculation of your monthly payment along with interest paid on the loan.
Create and print a loan amortization schedule.
This calculator assumes interest compounding occurs monthly. For additional compounding options use our Advanced Loan Calculator.
Loan Payment Formula
To find the monthly payment we solve this equation for Payment; where n is number of months, and i is the interest rate per month in decimal form:
\( \text{Payment}=\dfrac{\text{Loan Amount} \times i(1+i)^n}{(1+i)^n-1} \)
Example Loan Payment Calculation
Suppose you take a $20,000 loan for 5 years at 5% annual interest rate.
n = 5 × 12 = 60 months
i = 5% / 100 / 12 = 0.004167 interest rate per month
Then using the formula with these values:
\( \text{Payment}=\dfrac{\text{Amount} \times i(1+i)^n}{(1+i)^n-1} \)
\( =\dfrac{(\$20,000)(0.004167)(1+0.004167)^{60}}{(1+0.004167)^{60}-1} \)
\( =\$377.42 \)
Total Interest Paid on a Loan
Total amount paid with interest is calculated by multiplying the monthly payment by total months. Total interest paid is calculated by subtracting the loan amount from the total amount paid. This calculation is accurate but not exact to the penny since, in reality, some actual payments may vary by a few cents.
$377.42 × 60 months = $22,645.20 total amount paid with interest
$22,645.20 - $20,000.00 = 2,645.20 total interest paid
FAQs
To start, you'd multiply your principal by your annual interest rate, or $10,000 × 0.05 = $500. Then, you'd multiply this value by the number of years on the loan, or $500 × 5 = $2,500. Now that you know your total interest, you can use this value to determine your total loan repayment required.
How much would a $50,000 loan cost per month? ›
Here's what a $50,000 loan would cost you each month
| 8.00% |
|---|
| Two-Year Repayment | $2,261.36/month, $4,272.75 in interest over time |
| Seven-Year Repayment | $779.31/month, $15,462.10 in interest over time |
| 10-Year Repayment | $606.64/month, $22,796.56 in interest over time |
Jan 20, 2024
Your income will determine the loan amount you are eligible for. Lenders will consider your take-home salary, minus certain common deductions such as gratuity, PF, ESI, etc. The take-home salary will determine the EMI amount you can afford and thus the total loan amount you can borrow.
How to figure out how much of a loan you can afford? ›
Using a percentage of your income can help determine how much house you can afford. For example, the 28/36 rule may help you decide how much to spend on a home. The rule states that your mortgage should be no more than 28 percent of your total monthly gross income and no more than 36 percent of your total debt.
How do I calculate my loan manually? ›
The formula is: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1], where M is the monthly payment, P is the loan amount, i is the interest rate (divided by 12) and n is the number of monthly payments.
How does a simple loan work? ›
A simple interest loan is a non-compounded form of lending where the interest is calculated on the remaining principal balance of your loan. This setup allows you to pay a set monthly amount plus interest, with the opportunity to decrease future payments by paying more upfront.
How much is a $20,000 loan for 5 years? ›
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| Loan Amount | Loan Term (Years) | Estimated Fixed Monthly Payment* |
|---|
| $20,000 | 5 | $415.07 |
| $25,000 | 3 | $771.81 |
| $25,000 | 5 | $514.57 |
| $30,000 | 3 | $926.18 |
13 more rowsMonthly Payments on a $10,000 Personal Loan
| Payoff period | APR | Monthly payment |
|---|
| 2 years | 15% | $485 |
| 3 years | 15% | $437 |
| 4 years | 15% | $278 |
| 5 years | 15% | $238 |
3 more rowsAug 31, 2021
The monthly payment on a $1,000 loan ranges from $14 to $100, depending on the APR and how long the loan lasts. For example, if you take out a $1,000 loan for one year with an APR of 36%, your monthly payment will be $100.
What is the formula for a loan? ›
FORMULA. The amount of interest, I I , to be paid for one period of a loan with remaining principal P P is I = P × r n I = P × r n , where r r is the interest rate in decimal form and n n is he number of payments in a year (most often n n = 12).
How do lenders calculate interest on a loan? tenure of 20 years/240 months and annual ROI of 6% (monthly = 0.005). Using the formula EMI = P * r * (1+r)^n/ ((1+r)^n-1), the EMI is calculated to be INR 14,329. The total amount payable is INR 14,329 * 240 = INR 34,38,960.
How do you estimate how much you can borrow? ›
The amount you could borrow is based on your income increased by a multiplier. Lenders traditionally offer an amount between four and five times your income, though in some cases they may offer more or less than this. If you are borrowing with a partner there are a few ways a lender might combine your incomes.
How much house can I afford if I make $36,000 a year? ›
On a salary of $36,000 per year, you can afford a house priced around $100,000-$110,000 with a monthly payment of just over $1,000. This assumes you have no other debts you're paying off, but also that you haven't been able to save much for a down payment.
How much can you borrow based on a certain salary? ›
Most lenders require that you'll spend less than 28% of your pretax income on housing and 36% on total debt payments. If you spend 25% of your income on housing and 40% on total debt payments, they'll consider the higher number and qualify you for a smaller amount as a result.
How much personal loan can I get approved for? ›
Personal loan amounts vary widely among lenders. While some lenders allow you to borrow up to $100,000, others offer loans only up to $20,000. Most base your maximum loan amount on financial factors, like your annual income, your credit score and your repayment history.
What is a basic loan calculation? ›
Formula for calculating simple interest
You can calculate your total interest by using this formula: Principal loan amount x interest rate x loan term = interest.
What is a simple interest loan formula? ›
How to Calculate Simple Interest? Simple Interest is calculated using the following formula: SI = P × R × T, where P = Principal, R = Rate of Interest, and T = Time period.
What is the easiest way to calculate simple interest? ›
The formula to determine simple interest is an easy one. Just multiply the loan's principal amount by the annual interest rate by the term of the loan in years. This type of interest usually applies to automobile loans or short-term loans, although some mortgages use this calculation method.
