Estimate monthly loan payments or calculate how long it will take to pay off a loan.
A loan is a contract between a borrower and a lender where money is borrowed and repaid over time with interest. Loans can be customized in many ways, but the two most common decision factors are the loan term and the monthly payment amount.
This Payment Calculator helps compare these options and understand how changes affect total interest paid and payoff time.
Fixed-term loans require repayment over a predetermined period of time. Mortgages, auto loans, and student loans commonly follow this structure.
Choosing the right term can depend on job security, savings, retirement planning, and long-term financial goals.
This method determines how long it will take to fully repay a loan when a fixed monthly payment is chosen. It is commonly used for credit cards and personal loans.
Borrowers with extra cash can add additional monthly payments to significantly reduce payoff time and interest costs.
If a monthly payment is not high enough to cover interest, the loan balance will continue to grow instead of shrinking.
Interest rate is the cost of borrowing the principal. APR (Annual Percentage Rate) includes interest plus fees such as closing costs, points, and administrative charges.
APR gives a more accurate picture of the total cost of a loan, especially for large loans like mortgages.
Fixed-rate loans maintain the same interest rate throughout the loan term. Variable-rate loans fluctuate based on market indices such as central bank rates.
Variable rates may be lower initially, but changes can affect monthly payments and total interest over time.
Variable interest rates are tied to benchmark indices like the Federal Reserve rate. Lenders may impose rate caps to limit how high the interest rate can rise.
These loans may benefit borrowers when interest rates are falling, but they also carry additional risk.
Shorter terms save interest but require higher monthly payments.
The loan balance may grow due to unpaid interest.
Use interest rate for basic calculations and APR for total cost comparisons.
They can be if interest rates rise, but may benefit borrowers when rates fall.
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