1. What is Bret Whissel's Loan Calculator?

The Bret Whissel loan calculator uses the standard amortization formula to calculate fixed monthly payments for installment loans. It provides accurate payment amounts based on principal, interest rate, and loan term.

2. How Does the Calculator Work?

The calculator uses the loan payment formula:

Where:

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

Explanation: The formula accounts for both principal and interest payments over the life of the loan, with more interest paid earlier in the loan term.

3. Importance of Loan Calculation

Details: Understanding your exact monthly payment helps with budgeting and financial planning. It also shows the true cost of borrowing through total interest calculations.

4. Using the Calculator

Tips: Enter the principal amount in dollars, annual interest rate as a percentage (e.g., 5.25 for 5.25%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What types of loans does this calculator work for?
A: This works for standard fixed-rate installment loans like mortgages, auto loans, and personal loans.

Q2: Does this include taxes and insurance?
A: No, this calculates principal and interest only. For mortgages, taxes and insurance would be additional.

Q3: How accurate is this calculator?
A: It provides mathematically exact results for fixed-rate loans, matching what lenders use.

Q4: Can I use this for adjustable-rate loans?
A: Only for the initial fixed-rate period. Adjustable rates would require recalculation when rates change.

Q5: How can I pay less interest overall?
A: Make additional principal payments when possible, or choose a shorter loan term.