Loan Payment Calculator

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Results listed in comparison table

Purchase Price ($):

Down Payment ($):

Trade-in Value/Other Payment ($):

Add Additional Int. Rates (%, comma-separated):

Select Loan Term (Months):

Custom Monthly Terms (e.g., 24, 78, 84, 120 etc.):

Include all terms in table

Understanding The Calculator Fields

Purchase Price ($): The total cost of the item you are purchasing (e.g., car, home).

Down Payment ($): The initial amount of money you pay upfront towards the purchase. This amount is subtracted from the purchase price to determine the loan principal.

Trade-in Value/Other Payment ($): The value of an item you are trading in (e.g., an old car) or any other one-time payment made towards the purchase. This also reduces the loan principal.

Add Additional Int. Rates (%, comma-separated): Enter specific interest rates you want to compare, separated by commas (e.g., 1.99, 10.5). The calculator will show payments for these rates in addition to a default set of rates.

Select Loan Term (Months): Choose a standard loan duration from the dropdown list (e.g., 36, 48, 60 months).

Custom Monthly Terms (e.g., 24, 78, 84, 120 etc.): If you want to see calculations for loan terms not in the standard list, enter them here, separated by commas. Using this field will override the "Select Loan Term" dropdown unless "Include all terms in table" is checked.

Include all terms in table: Check this box if you want the results table to show calculations for all standard loan terms (36, 48, 60, 66, 72 months) plus any custom terms you've entered. If unchecked, and custom terms are entered, only custom terms will be shown. If unchecked and no custom terms are entered, only the selected standard term will be shown.

How Loan Payments Are Calculated

Loan payments are typically calculated using a standard amortization formula. This formula takes into account three main factors:

Principal (P): The total amount of money borrowed. This is the Purchase Price minus the Down Payment and any Trade-in Value.
Interest Rate (r): The annual interest rate charged by the lender, expressed as a decimal and then converted to a monthly rate (annual rate / 12).
Number of Payments (n): The total number of payments over the life of the loan (loan term in months).

The formula for the monthly payment (M) is:

M = P * [r(1+r)^n] / [(1+r)^n – 1]

Where:

M = Monthly Payment
P = Principal Loan Amount
r = Monthly Interest Rate (Annual Rate / 12)
n = Number of Months (Loan Term)

Each payment consists of a portion that goes towards paying down the principal and a portion that covers the interest accrued for that month. Early in the loan, a larger part of the payment goes to interest, while later on, more goes towards the principal.

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