Repayment Calculator

How does this repayment calculator work?

This financial tool computes all the relevant payments details for a loan no matter of its type: it can be either business, student, personal or home loan. It takes account of the amount borrowed, the period to payoff in years, a constant interest rate, a desired repayment frequency (any from weekly, bi-weekly, monthly, bi-monthly, quarterly, semi-annually or even annually) and a start date.

The algorithm behind this repayment calculator uses the compound interest formulas as presented here:

• Weekly:

RPV = LAB*[(1+((r/52)/100))^(52*n)].

• Bi-weekly:

RPV = LAB*[(1+((r/26)/100))^(26*n)]

• Monthly:

RPV = LAB*[(1+((r/12)/100))^(12*n)]

• Bi-monthly:

RPV = LAB*[(1+((r/6)/100))^(6*n)]

• Quarterly:

RPV = LAB*[(1+((r/4)/100))^(4*n)]

• Semiannually:

RPV = LAB*[(1+((r/2)/100))^(2*n)]

• Annually:

RPV = LAB*[(1+(r/100))^(2*n)].

Where:

RPV = regular payment value depending on the frequency;

LAB = loan amount taken

r=interest rate for the frequency payment specified;

n=loan term in years.

The payment details displayed are:

• The regular repayment value paid with the frequency that was specified within the form.
• Total paid for the loan meaning the principal plus the interest paid. Total paid can be estimated as well by multiplying the RPV with the total number of payments to be made.
• Total interest paid is obtained by subtracting the LAB from the total paid figure.
• Estimated payoff date it the calendar date when the loan is considered to be repaid entirely.
• Apart from the results that are listed above this application also generates a detailed amortization schedule.

Example of a calculation

Assuming someone takes a mortgage loan of $100,000, over 30 years at a fixed interest rate of 3.89% and that the payment frequency is monthly, let’s figure out the repayment schedule starting April 2015:

■ Monthly payment: $471.10
■ Loan amount: $100,000.00
■ Total Paid: $169,594.37
■ Total Interest Paid: $69,594.37
■ Loan term: 360 months
■ Annual Interest rate: 3.89 %
■ Payment frequency: Monthly
■ Payoff date: March, 2045

Time to repay and repayment frequencies depend on the loan type

The repayment schedule varies from one case to another, and so here are some peculiarities of each loan type:

• Mortgage loans usually start to be repaid with the next month when the contract was signed. The most often payment frequency is monthly, while the term varies from 5 to 30 years. Most often people take mortgage for 20, 25, 30 years because the amount borrowed is significant.

• Student loans need to be repaid usually after graduation by a monthly payment within limits that depend on the annual gross income earned which varies from one country to another. Thus the period to pay back depends on the regular payment amount, usually takes from 3 to 5 years, but not more than 10 years.

• Personal loans are taken for a period which may vary from few months to few years, but not more than 5 years. The repayment can take place weekly, bi-weekly, monthly or bi-monthly. Most often people choose to pay on a monthly basis.

• Business loans usually can be repaid either monthly, quarterly, semi-annually or even annually and the time frame to be debt free depends on the amount borrowed. It usually varies from 1 to 10 years.