Amortization Calculator For Existing Loan Amount

Amortization Formula for Existing Loan:

\[ P_{existing} = PMT \times \frac{(1 + r)^{remaining_n} - 1}{r \times (1 + r)^{remaining_n}} \]

Remaining Principal (P_existing):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Amortization Formula for Existing Loan?

The amortization formula calculates the remaining principal balance on a loan based on the monthly payment amount, interest rate, and remaining term. This is useful for understanding how much you still owe on a loan.

2. How Does the Calculator Work?

The calculator uses the amortization formula:

\[ P_{existing} = PMT \times \frac{(1 + r)^{remaining_n} - 1}{r \times (1 + r)^{remaining_n}} \]

Where:

\( PMT \) — Monthly payment amount
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( remaining_n \) — Remaining number of monthly payments

Explanation: The formula calculates the present value of the remaining payments to determine the current loan balance.

3. Importance of Loan Amortization

Details: Understanding your remaining loan balance helps with refinancing decisions, prepayment strategies, and financial planning.

4. Using the Calculator

Tips: Enter your regular monthly payment amount, annual interest rate (as a percentage), and the number of months remaining on your loan. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why would I need to calculate my remaining loan balance?
A: This calculation helps when considering refinancing, making extra payments, or understanding your equity position.

Q2: Does this work for any type of loan?
A: This formula works for standard fixed-rate amortizing loans (mortgages, auto loans, etc.). It doesn't work for interest-only loans or adjustable-rate loans.

Q3: How accurate is this calculation?
A: It's mathematically precise for fixed-rate loans if you know the exact payment amount, interest rate, and remaining term.

Q4: What if I've made extra payments?
A: The calculation assumes you've made all payments exactly as scheduled. Extra payments would reduce the balance more than this calculation shows.

Q5: Can I use this for mortgage loans?
A: Yes, this works well for standard fixed-rate mortgages. For ARMs, you would need to know the current rate and remaining term at that rate.