1. What is the Loan Payment Calculator?

The Loan Payment Calculator computes your monthly loan payments including principal and interest, and shows how extra payments can reduce your loan term and total interest paid.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

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

Extra Payments: When you enter an extra payment amount, the calculator recalculates your loan payoff schedule to show how much time and interest you'll save.

3. Importance of Loan Payment Calculation

Details: Understanding your exact loan payment helps with budgeting, comparing loan offers, and planning early payoff strategies to save on interest.

4. Using the Calculator

Tips: Enter the principal amount, annual interest rate, loan term in years, and optionally any extra monthly payment you plan to make. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do extra payments affect my loan?
A: Extra payments reduce the principal faster, which decreases total interest paid and shortens the loan term.

Q2: Should I pay extra toward principal or interest?
A: Extra payments typically go toward principal first, which is most effective for saving on interest.

Q3: How much can I save with extra payments?
A: Even small extra payments can save thousands in interest and cut years off your loan term.

Q4: Are there prepayment penalties?
A: Some loans have prepayment penalties - check your loan agreement before making extra payments.

Q5: Is it better to make extra payments or refinance?
A: It depends on your interest rate and loan terms - this calculator can help compare options.