Loan Calculator

About Our Loan Interest Calculator

Somehow, loan gives a flexible corner to people by paying for their emergency expense at once. However, loan is a sensitive matter since you have to pay back with the interest. Therefore, you must maintain accuracy while calculating every single thing. While you are already here, our loan calculator take in the full responsibility for your loan calculation.

What is a Loan?

A loan is the act of lending money to another individual or entity by an individual, financial institution, organisation, or bank. The borrower incurs a debt and liable to pay back the amount in future with the interest. There are various types of loans such as personal loans, home loans, student loans, auto-loans, car loans and many more.

Majority of loans fall into the below three categories,

Amortized Loan: Scheduled periodic payment until a loan gets mature.

Deferred Payment Loan: It’s more like a buy now, pay later loan.

Bond: A fixed amount is paid at loan maturity.

You can calculate any of the above loan amount using our finance calculator.

What Are the Loan Basics for Borrowers?

Before you borrow a loan, you must know the core elements of loan. Here are some loan basics for borrower,

• Rate of Interest:

Interest rate is the amount, a lender charges to a borrower against the principle amount. Interest is the profit for the lender and expense for the borrower. This rate is typically charged in percentage on principle amount loaned on annual basis. Hence, it is expressed in APR (Annual Percentage Rate). Use free loan calculator to know your total loan amount.

Usually bank publishes this interest rate and often applies on saving account, certificate of Deposits, money market. Moreover, it also applies to the profit raised from the deposit account at credit union or banks. The income gained from this deposits are known as Annual percentage Yield (APY). You can calculate the rate of interest using loan interest calculator.

• Compounding Frequency:

Bank charges two types of interest on the loan, simple interest and compound interest. Simple interest is charged on mortgage loan while compound interest is charged for other loans. Compound interest is an interest charged on principle amount and interest rate from previous year altogether. CI is also called as Interest on interest. This interest often charged on monthly basis and sometimes, quarterly or semi-annually. For compounding the interest, you can use a compound interest loan calculator. If you get confused to calculate your total interest then, use this free total interest calculator.

• Period of Loan:

Period of a loan is the term allotted to the borrower so that he can pay the minimum amount of loan every month. Loan term plays a crucial role from certain aspects as it can directly affect the amount of interest. Longer the loan term, higher the interest charged. A borrower will get relief as he has to pay lesser amount each month but at the end it will raise the total cost of the loan. If you are planning to take a long term loan then, use loan repayment calculator to make a wise decision.

What Are the Types of Consumer Loans?

Consumer loans are of two types: Mortgage Loans (Secured loans) and Unsecured Loans.

Mortgage Loans (Secured Loans): A person is given a loan against some securities or assets is known as Secured Loan. The loan is backed by collaterals to secure the finance because secured loans typically lends a huge amount with lower interest rate and has longer repayment period. Employ loan rate calculator to calculate your future interest. The lender seize the mortgaged assets until the entire loan is repaid by the borrower, this will reduce the risk for the lender. Secured loans are safer and easily approvable than unsecured loans, the name says it all.

Unsecured Loans: Unsecured loan is the loan which is not backed by any collateral security. These loans approve a limited amount with higher interest rate and for short repayment time. The unsecured loans are approved after verifying the financial soundness of the borrower. Since, this loan is a bit insecure, the lender determines the creditworthiness of borrower through 5 C’s. That are character, capital, collateral, capacity and condition.

This loan holds a greater risk as if the borrower failed to repay the amount, the lender may not be able to recover the dues. To rule out this limitation, sometimes a lender ask for the sign of Guarantor (a person who agrees to pay the debt if the borrower will fail to repay). Use this total loan cost calculator for free to calculate your overall cost.

What is the Formula to Calculate a Loan?

You can employ below formulas to calculate loans,

Amortized loan:

Total Repayment = P * (r/n) * (1 + r/n)^t*n / [(1 + r/n)^t*n – 1]

• P : Outstanding Loan Amount
• r : Rate of Interest
• t : Tenure of the loan
• n : No. of Compounding Per Year

Deferred Payment Loan:

Deferred Annuity = P * [1 – (1 + r)^-n] / [(1 + r)^t* r]

• P : Annuity Payment
• r : Rate of Interest
• n : Number of Periodic Payments
• t : Period of Delay

Don’t’ get confused while looking at these formulas. If you are running short on time, we have a quick and simple loan calculator.

How does the Loan Calculator work?

When you are not so familiar using formula it will certainly take up your time. There are also possibilities of making an error, because the calculation of finance is quite tricky. As a result, you just need to invest few seconds to use our online loan calculator to get an exact response.

• Step: 1 – Click here to use our loan amount calculator.
• Step: 2 – Choose the category of your loan from Amortized loan, deferred loan or bond.
• Step: 3 – Fill in the information asked i.e., Principal amount, rate of interest, term of loan, compounding frequency and Pay-back period if it is amortized loan.
• Step: 4 – Click on calculate to get an effortless Result.
• Step: 5 – The result will come up with monthly payment, total payment and total interest separately for clear clarification.
• Step: 6 – If you click on ‘show schedule’ you will see entire calculation till the balance gets zero. This will show the entire table involving the beginning balance, interest, principal and ending balance.

You can clear your vision regarding your future payments of the loan using our loan cost calculator. If you wish to clear the filled data, simply click on ‘clear’. This will not only give you a sorted data but also will save your time for decision making.

What Are the Advantages of Using a Loan Calculator?

Many benefits will go hand in hand if you use a loan calculator,

• Easily Accessible and a Handy tool: Our calculator is easy to reach as this is available online and such an easy tool to use. You just Click here, choose your loan and fill out the information you are asked. You will get the value of each installment systematically, you can use this tool anywhere and anytime by mobile phone laptop, or tablet.
• Easily Schedule you monthly budget being loyal with your EMIs: Our loan calculator serves the to-the-point amount to your plate, so you can manage your monthly expenses while keeping the exact amount aside for your EMI. This way you can decide your monthly budget effortlessly without missing on anything.
• Decision making on future loan: If you are planning to take a loan in near future, you can fill in the information in the loan calculator as per requirement and grab the sorted details of every single thing. You can experiment different loan amounts with different rate of interest to fit in your budget and convenience. This will help you decide the interest rate, tenure of loan and total loan amount as per your affordability.
• Saves Time and Gives precise results: The best thing is you can completely put your trust on our calculator. This will not only save your valuable time but will also give you accurate results. You will get the benefit of sorted details in the same zone. This is not just a calculator but your loan planner.

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