Loan Calculator

Calculate your estimated monthly loan payment.

What is a Loan Calculator?

A Loan Calculator is a financial planning tool that helps you estimate the monthly payments, also known as Equated Monthly Installments (EMI), for a loan. By providing the loan amount, annual interest rate, and loan term, it gives you a detailed breakdown of your financial commitment. This includes your monthly payment amount, the total interest you will pay over the life of the loan, and the total amount paid back to the lender. It's an indispensable tool for anyone considering a home loan, car loan, personal loan, or any other type of amortized loan.

How to Use the Loan Calculator

To estimate your monthly loan payments, follow these simple steps:

  1. Loan Amount ($): Enter the principal amount you wish to borrow. For example, for a home loan of $250,000, enter '250000'.
  2. Annual Interest Rate (%): Input the interest rate quoted by your bank or financial institution. For instance, if the mortgage rate is 6.5%, enter '6.5'.
  3. Loan Term (Years): Specify the duration over which you plan to repay the loan. A typical home loan tenure is 15, 20, or 30 years.

After filling in these values, the calculator will immediately display your estimated monthly payment, along with the total interest and principal breakdown over the loan's duration.

Understanding the Results

  • Monthly Payment: This is the fixed amount you will pay each month. It consists of both principal and interest. In the beginning, a larger portion of your payment goes towards interest. Over time, more of it goes towards paying down the principal.
  • Total Interest Paid: This is the total cost of borrowing the money. A lower interest rate or a shorter loan term will reduce this amount significantly.
  • Total Payment: This is the sum of the principal loan amount and the total interest paid over the life of the loan.

Frequently Asked Questions (FAQ)

Q: What is an amortization schedule?

A: An amortization schedule is a complete table of periodic loan payments, showing the amount of principal and the amount of interest that comprise each payment until the loan is paid off at the end of its term. While our calculator shows the totals, a full schedule details this for every single payment.

Q: How does changing the loan tenure affect my EMI?

A: A shorter loan tenure increases your monthly payment (EMI) but reduces the total interest you pay. Conversely, a longer tenure makes the EMI more affordable on a monthly basis, but you end up paying significantly more in interest over the loan's lifetime. Use the calculator to see this trade-off.

Q: Does this calculator work for all types of loans?

A: Yes, this calculator can be used for any type of loan that has a fixed interest rate and a fixed repayment period, including home loans, auto loans, and personal loans. It is not suitable for interest-only loans or loans with variable interest rates.