1. What is the 1 Million Dollar Loan Calculator?

This calculator computes the monthly payments for a $1 million loan, typically used for mortgages or commercial loans. It helps borrowers understand their repayment obligations.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( P \) — Principal amount ($1,000,000)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Number of payments (term in years × 12)
• \( PMT \) — Monthly payment amount

Explanation: The formula accounts for both principal and interest payments over the loan term.

3. Importance of Loan Payment Calculation

Details: Understanding monthly payments is crucial for financial planning, assessing affordability, and comparing different loan options.

4. Using the Calculator

Tips: Enter the annual interest rate (as a percentage) and loan term in years. The calculator will show monthly payment, total payments, and total interest.

5. Frequently Asked Questions (FAQ)

Q1: Does this include taxes and insurance?
A: No, this calculates principal and interest only. Actual mortgage payments may include escrow for taxes and insurance.

Q2: What's a typical interest rate for a $1M loan?
A: Rates vary by market conditions, loan type, and creditworthiness. Commercial loans typically have higher rates than residential mortgages.

Q3: How does loan term affect payments?
A: Longer terms reduce monthly payments but increase total interest paid. A 30-year term will have lower payments than a 15-year term.

Q4: Are there prepayment penalties?
A: Some loans have prepayment penalties. Check your loan agreement as this calculator assumes no prepayment penalties.

Q5: Can I use this for adjustable-rate loans?
A: This calculates fixed-rate payments only. Adjustable-rate loans would require different calculations.