1. What is the Loan Payment Calculator?

This calculator determines monthly loan payments for Florida residents, including the impact of making extra payments. It helps borrowers understand how additional payments can reduce loan term and total interest.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( PMT \) — Monthly payment
• \( P \) — Principal loan amount (USD)
• \( r \) — Monthly interest rate (decimal)
• \( n \) — Number of months

Explanation: The formula calculates the fixed monthly payment required to fully amortize a loan over its term, accounting for compound interest.

3. Importance of Extra Payments

Details: Extra payments directly reduce principal, leading to less interest over time and earlier loan payoff. Even small additional amounts can make a significant difference in total interest paid.

4. Using the Calculator

Tips: Enter loan amount in USD, annual interest rate as percentage, loan term in years, and any planned extra monthly payment. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with extra payments?
A: Savings depend on loan amount, rate, term, and extra payment amount. Even $50-100 extra per month can save thousands in interest.

Q2: Should I pay extra principal or invest?
A: Compare loan interest rate with expected investment returns. Paying down debt is a guaranteed return equal to your interest rate.

Q3: Are there prepayment penalties in Florida?
A: Florida law prohibits prepayment penalties on most residential mortgages after the first 5 years. Check your loan terms.

Q4: How do extra payments affect amortization?
A: Extra payments reduce principal faster, causing more of each subsequent payment to go toward principal rather than interest.

Q5: Is it better to make biweekly payments?
A: Making half-payments every two weeks (26 payments/year) equals one extra monthly payment annually, reducing term by several years.