This amortization calculator displays your loan’s payment schedule with all the useful details such as the monthly payment, total interest paid & pay-off date. Everything there is to know on how to deal with your loan payoff plan is detailed below the form.
What is a loan?
A loan is an agreement between two parties: one is the creditor (lender) and the other one is the debtor (borrower), in which the first one offers a specific amount of money to the last one with the expectation that the borrower will do the total repayment, meaning the principal plus the interest for the money that were borrowed within the term agreed by the two parties.
When speaking about loan, there should be very clear established at least the following terms:
- Loan amount which is the amount borrowed;
- Loan term which is the defined time period usually expressed in years or months, in which the one who’s taking the loan should do the total repayment;
- Interest rate is the rate of interest (cost of the money) that the debtor will pay for the money that were borrowed.
- Due times for the regular payments the borrower should make to the lender.
What is an amortization schedule?
Following the explanation presented above, a major aspect to agree is the amortization schedule, which is the repayment plan the debtor has to follow within the agreed term. It is detailed depending on the payment frequency agreed or it can be grouped by years if requested. For instance in case of a loan with monthly payments, the amortization plan should be detailed per month.
How can this amortization calculator help?
As the main aspects to focus on when taking a loan were established, our amortization calculator which provides the payment plan by month, can help you simulate and compare your total out of pocket as well as monthly payments values between as many loan offers you may want. It takes account of a desired loan amount, specific term and certain interest rate then it returns the following details:
- Monthly payment consisting of principal and interest;
- Total number of monthly payments you have to make;
- Total interest paid;
- Total amount paid and the estimated pay-off date;
- A detailed repayment schedule that can be found by clicking the button right after the summary results.
Please note that is estimates how much of your monthly payments will go towards the principal and how much will go towards interest, but it does not include taxes or insurance costs.02 Dec, 2014