Loan Calculator

How you can calculate loan manually without using any tool?

Formula

Where:

• $M$ = Monthly payment
• $P$ = Principal (loan amount)
• $r$ = Monthly interest rate (Annual Rate ÷ 12)
• $n$ = Total number of monthly payments

Step-by-step guide

1. Enter the original loan amount.
2. Convert the annual interest rate into a monthly decimal.
3. Multiply the loan term by 12 to get the number of monthly payments.
4. Insert all values into the amortization formula.
5. Calculate the monthly payment.
6. Multiply the monthly payment by the total number of payments to find the total repayment.
7. Subtract the principal from the total repayment to determine the total interest paid.

Practical Example

Suppose you borrow $20,000 at 6% annual interest for 5 years.

Given:

• Principal $(P)=20,000$
• Annual Interest Rate = 6%
• Monthly Interest Rate $(r)=0.06\div12=0.005$
• Loan Term = 5 years
• Total Payments $(n)=5\times12=60$

Using the formula:

Result:

• Monthly Payment ≈ $386.66
• Total Payments ≈ $23,199.60
• Total Interest Paid ≈ $3,199.60

Manual calculations provide a reliable estimate, but our loan calculator performs these calculations instantly, generates an amortization schedule, and lets you compare repayment options, APR, principal balances, and total borrowing costs more efficiently.

Types of Loans

Different loan types serve different financial needs. Understanding how each works helps borrowers compare repayment terms, interest rates, eligibility, and overall borrowing costs.

Personal Loans

Personal loans provide flexible financing for debt consolidation, home improvements, emergencies, travel, weddings, or major purchases. Borrowers typically repay them through fixed monthly installments over an agreed loan term.

Secured Personal Loans

Secured personal loans require collateral, such as savings, investments, or another valuable asset. Because the lender assumes less risk, borrowers often receive lower interest rates, higher borrowing limits, and longer repayment terms than unsecured financing.

Unsecured Personal Loans

Unsecured personal loans do not require collateral. Approval depends on factors such as credit score, credit history, income, debt-to-income ratio, and overall creditworthiness. They generally carry higher interest rates because the lender assumes greater risk.

Student Loans

Student loans help cover tuition, books, housing, and other qualified education expenses. Repayment terms, interest rates, and borrower protections vary between federal education loans and private student loans.

Federal Subsidized Student Loans

Federal Subsidized Student Loans are available to eligible undergraduate students with financial need. The government pays interest while the student remains enrolled at least half-time and during certain approved deferment periods.

Federal Unsubsidized Student Loans

Federal Unsubsidized Student Loans are available to eligible undergraduate, graduate, and professional students regardless of financial need. Interest begins accruing immediately after loan disbursement.

Federal Direct PLUS Loans

Federal Direct PLUS Loans help parents and graduate students pay education costs not covered by other financial aid. Approval usually requires a satisfactory credit history.

Parent PLUS Loans

Parent PLUS Loans allow eligible parents of dependent undergraduate students to borrow funds for tuition and other education-related expenses after other financial aid has been applied.

Graduate PLUS Loans

Graduate PLUS Loans help graduate and professional students finance remaining educational expenses after scholarships, grants, and Direct Unsubsidized Loans have been exhausted.

Private Student Loans

Private student loans are issued by banks, credit unions, and private lenders. Interest rates, repayment options, borrower benefits, and approval requirements vary based on the lender and the applicant's credit profile.

Mortgage Loans

Mortgage loans finance residential property purchases or refinancing. Borrowers repay the principal and interest through scheduled installments over terms commonly ranging from 15 to 30 years, with the property serving as collateral.

Auto Loans

Auto loans help finance new or used vehicle purchases. Loan payments depend on the purchase price, down payment, interest rate, loan term, trade-in value, and lender requirements.

Business Loans

Business loans provide funding for equipment, inventory, expansion, payroll, working capital, or commercial property. Lenders evaluate revenue, business history, creditworthiness, cash flow, and financial performance before approval.

Home Equity Loans

Home equity financing allows homeowners to borrow against the equity built in their property. It can fund renovations, debt consolidation, education costs, or other significant expenses.

Home Equity Loan

A home equity loan provides a one-time lump sum with fixed interest rates and predictable monthly payments. Borrowers repay the loan over a fixed repayment period using their home's equity as collateral.

Home Equity Line of Credit (HELOC)

A Home Equity Line of Credit (HELOC) offers a revolving credit line secured by home equity. Borrowers can withdraw funds as needed during the draw period and repay based on the outstanding balance.

Debt Consolidation Loans

Debt consolidation loans combine multiple debts into one loan with a single monthly payment. They can simplify repayment, improve budgeting, and potentially reduce overall interest costs when borrowers qualify for favorable rates.

Construction Loans

Construction loans provide short-term financing for building a new home or major renovation. Funds are typically released in stages as construction progresses, then converted into a traditional mortgage or repaid upon completion.

Payday Loans

Payday loans are short-term, high-cost loans intended for immediate cash needs. Due to high fees and interest rates, borrowers should carefully review repayment terms and consider lower-cost financing alternatives whenever possible.

Medical Loans

Medical loans help finance healthcare expenses that insurance may not fully cover, including surgeries, dental procedures, fertility treatments, and other qualified medical costs.

Secured Loans

Secured medical loans require collateral, which may help borrowers qualify for lower interest rates, larger loan amounts, and more flexible repayment terms depending on lender policies.

Unsecured Loans

Unsecured medical loans rely primarily on the borrower's credit profile, income, and repayment ability. They eliminate collateral requirements but often include higher interest rates than secured financing.