Remaining Balance Formula:
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The remaining balance formula calculates how much you still owe on your car loan after making a certain number of payments. It takes into account your monthly payment amount, the interest rate, and how many payments you have left.
The calculator uses the remaining balance formula:
Where:
Explanation: The formula calculates the present value of the remaining payments, accounting for the time value of money through the interest rate.
Details: Knowing your remaining balance helps when considering early payoff, refinancing, or trading in your vehicle. It shows exactly how much you need to pay to satisfy the loan.
Tips: Enter your monthly payment amount in dollars, monthly interest rate as a decimal (divide APR by 12), and the number of payments remaining. All values must be positive numbers.
Q1: How do I find my monthly interest rate?
A: Divide your annual percentage rate (APR) by 12. For example, 6% APR = 0.06/12 = 0.005 monthly rate.
Q2: Why does my remaining balance differ from the lender's statement?
A: Lenders may use slightly different calculation methods or account for additional fees. This calculator provides an estimate.
Q3: Can I use this for other types of loans?
A: Yes, this formula works for any amortizing loan with fixed monthly payments (mortgages, personal loans, etc.).
Q4: What if I want to pay extra each month?
A: Extra payments reduce principal faster. You would need to recalculate using your actual payment amount and remaining term.
Q5: Does this account for early payment penalties?
A: No, this calculator only computes the mathematical remaining balance. Check your loan terms for any prepayment penalties.