installment loan payoff calculator

installment loan payoff calculator

The Repayment Calculator can be used for loans in which a fixed amount is paid back periodically, such as mortgages, auto loans, student loans, and small business loans. For other repayment options, please use the Loan Calculator instead. Include any upfront fees into the calculator to compute the real rate of interest.

Repayment is the act of paying back money previously borrowed from a lender, and failure to repay debt can potentially force a person to declare bankruptcy and/or severely affect credit rating. It is usually done in periodic payments that include some principal and interest. There can possibly be fees involved; when doing calculations, all upfront fees entered will be rolled into the loans.

Concerning mortgages, repayment can be done using fixed or variable rates, or even switched from one to the other during the life of the loan. However, this calculator does not consider variable rate loans. For more information, use the Mortgage Calculator.

In the United States, the government offers specialized plans that are geared specifically for the repayment of federal student loans. Depending on the individual borrower, there are repayment plans that are income-based, plans that extend the term of the loan, or plans specifically for parents or graduate students. Repayment of most federal student loans can be postponed to some point in the future. Federal extended repayment plans can be stretched up to 25 years, but keep in mind that this will result in more interest paid out overall. For more information, use the Student Loan Calculator.

Because they are considered revolving credit, the repayment of credit cards is different from typically structured amortized loans. Whereas the latter requires a set amount to be paid a month, the repayment of revolving credit is more flexible in that the amount can vary accordingly, although the minimum payment due on each credit card each month must be met to avoid penalty. For more information, use the Credit Card Calculator.

Choose this option to enter a fixed loan term. For instance, the calculator can be used to determine whether a 15-year or 30-year mortgage makes more sense, which is a common conundrum for most people ready to purchase a house. The calculated results will display the monthly installment required to pay off the loan within the specified loan term.

Choose this option to enter a fixed amount that will be due in equal installments each month until the loan and interest are paid in full. For instance, this may be a set amount of disposable income determined by subtracting expenses from income that can be used to pay back a loan. The calculated results will display the loan term required to pay off the loan at this monthly installment.

It is important to first consider whether utilizing any of the strategies below to repay loans faster is actually a good idea. Depending on individual financial situations, it may or may not be wise. While extra payments toward loans are great, they are not absolutely necessary, and there are opportunity costs that deserve consideration. For instance, an emergency fund can come in handy when incidents like medical emergencies or car accidents happen. Even stocks that perform well during good years are more financially beneficial than extra payments towards a low interest mortgage.

Of course, shorter loans will be repaid faster. Not only that, but reducing the length of the loan generally lowers the total amount of interest paid, because less compound interest is being accrued. It's important to note that shorter terms tend to have higher monthly installments.

If there is no prepayment penalty involved, any extra money going towards a loan will be used to lower the principal amount due. This will speed up the time in which the principal due finally reaches zero, and reduces the amount of interest due because of the smaller principal amount that is owed.

Similar to paying extra, submitting half of the monthly payment every two weeks instead of one single monthly payment can speed up the repayment of loans in two ways. Firstly, less total interest will accrue because payments will lower the principal balance more often. Secondly, biweekly payments for a whole year will equal 26 yearly payments, because there are 52 weeks in a year. This is equivalent to make 13 monthly payments a year. Similar to paying extra, make sure there are no prepayment penalties involved first.

Loan refinancing involves taking out a new loan, sometimes with more favorable terms, in order to pay off a previous loan. There are several ways in which refinancing can help repay loans faster: by refinancing to a shorter-term loan, higher monthly payment, or to a biweekly schedule of payments.

Free calculators and unit converters for general and everyday use.

Our online tools will provide quick answers to your calculation and conversion needs. On this page, you can calculate time to payoff or loan term for fixed loans including mortgages, student loans and credit cards.

Android: Use this loan calculator offline with our all-in-one calculator app.

Advanced loan payoff calculator

To calculate loan tenure where payment is made in daily, quarterly or yearly installments, use the present value of annuity calculator. Select " Solve for No. of payments" and enter the loan amount in the present value field.

The loan term or number of monthly payments can be calculated by solving for N in the mortgage formula shown below:

P = principal amount borrowed,

c = periodic payment,

r = monthly interest rate, express as decimal (annual interest rate in % divided by 12, and divided by 100)

N = loan term in months

For calculating savings on early loan repayment, click on the calculator linked below.

ThinkCalculator - Your Calculator Resources Online!

Installment Loan Payoff Calculator

Installment Loan Payoff Calculator to find out how much monthly installment and total interest a borrower should repay on his principal.

Enter Loan Amount, Interest rate (%) and Loan terms get your result.

Use these loan payment calculators to work out repayment figures for personal loans, student loans or any other type of credit agreement. The first calculator breaks down monthly repayments for a secured or unsecured loan. The second calculator helps you work out how long it will take to pay off your loan.

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Whilst every effort has been made in building these loan payment calculators, we are not to be held liable for any special, incidental, indirect or consequential damages or monetary losses of any kind arising out of or in connection with the use of the calculator tools and information derived from the web site. These tools are here purely as a service to you, please use them at your own risk.

The calculations given by the loan payment calculators are only a guide. Please speak to an independent financial advisor for professional guidance. Read the full disclaimer.

A secured loan is a loan in which the borrower pledges an asset (e.g. a car or property) as collateral for the loan. Due to the fact that you are borrowing money against an asset you own, the interest rates tend to be a lot lower than with unsecured loans. That said, the risks can be higher due to the fact that your asset can be repossessed if you do not keep up the repayments. Secured loans are normally used to borrow large sums of money. Some examples include home equity, mortgages and auto loans.

An unsecured loan is a monetary loan that is not secured against the borrower's assets. Unsecured loans often take the form of credit card debt, personal loans, bank overdrafts, credit facilities or corporate bonds. You can learn more about unsecured loans in this article from Investopedia.

A balloon payment is a large, lump-sum payment made at the end of a long-term loan. It is commonly used in car finance loans as a way of reducing monthly repayment figures. Be aware that once you reach the end of your loan period, that balloon amount becomes payable. More information about balloon payments is available in our article, What is a balloon payment?

What is the effective annual rate?

The effective annual rate is the actual interest rate that you pay on a loan if the loan is affected by compounding. This loan calculator compounds interest on a monthly basis.

APR stands for Annual Percentage Rate and is an important factor in determining the overall cost of a loan. You can use APR to compare different personal loan offers. When you arrange a loan with a finance company, their offer can include extra fees associated with the loan. The APR figure takes that information into account, giving you a simple percentage interest rate to allow you to compare and shop around. For information on interest rates and APR, see our article What is APR?

The loan calculator above uses the following formula to calculate repayment figures:

Monthly payment = [ r + r / ( (1+r) ^ months -1) ] x principal loan amount

Where: r = decimal rate / 12.

For repaying a loan of $1000 at 5% interest for 12 months, the equation would be:

Monthly payment = [ (0.05 / 12) + (0.05 / 12) / ( (1+ (0.05 / 12)) ^ 12 -1) ] x principal loan amount

Monthly payment = [ 0.0041666667 + 0.0041666667 / (1.0041666667 ^ 12 - 1)] x 1000.

Monthly payment = [ 0.0041666667 + 0.0041666667 / (1.0511618983 - 1)] x 1000.

Monthly payment = [ 0.0041666667 + 0.0041666667 / 0.0511618983] x 1000.

Monthly payment = [ 0.0041666667 + 0.081440816] x 1000.

Monthly payment = 0.085607483 x 1000.

Monthly payment = $85.607483.

If you have any problems using my loan calculator tool, or any suggestions, please contact me.

This loan payoff calculator can help you estimate when you can be debt free & how much you need to do so either by making extra payments or by paying off altogether. You can also calculate how much you can save by paying off earlier. Below the tool you can understand more about the payment amounts needed.

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How to pay off your loan earlier than the initial amortization schedule?

There are basically two options available to repay your loan earlier than expected and both can result in some savings:

1. First scenario is by paying off your loan altogether. At a first glance, you have to know the initial loan amount borrowed, the initial repayment term in years, the time left to pay in yearns and months and the annual interest rate.

Providing the above details into this calculator, you’ll be able to determine the amount you need to have in order to make a final single payment that covers the principal amount left.

Apart from the principal amount to be paid you’ll also be given the rough figure of the interest you save by paying off altogether, the count of the monthly payments made so far and how much principal and interest were paid by these regular payments.

2. Second option is to repay your loan balance with monthly extra payments added to the standard ones as they were agreed within your borrowing contract. In this case apart from the current details of the payment schedule requested in first scenario, you’ll have to assume how much you can afford to add as an extra amount to your regular monthly payments .

Please note that the additional payments go on paying the principal figure only, thus in the end they result in savings from interest and in paying in full your debt earlier than the pay-off date specified in your amortization schedule .

What to take into account before deciding to pay off early your loan?

The decision whether to pay off early your loan can be made by considering several aspects as explained here which aim to clarify how useful would this strategy be:

1. What types of loans do you owe and how high are their interest rates?

The recommended approach would be to try and payoff early the loan that carries the highest interest rate. It is well known that credit cards have the highest interest rates in comparison to the other types of debts.

Thus whenever you can afford to it is recommended to try pay off credit card negative balance first as you can save more interest than in case of other loans such as home loans , auto loans or student loans which usually carry lower interest rates.

2. Are there any penalties for paying off your loan early?

Before deciding to pay off early your debts please take into account the fact that some lenders charge a fee for early repayments that is usually stated in your borrowing contract so you may need to check that first.

In case these fees exist you have to determine if by paying off earlier than agreed you pay less than the total left to be paid.

More specifically you have to check whether the amount of the principal plus the one of the repayment fee is less than the total left to be paid by regular payments (principal + interest).

3. Which is the time left to pay and is it worth risking that?

Whenever analyzing how beneficial will be an early pay off you have to consider the time left to repay, what savings are made from interest and whether there are risks of default in case you owe several types of loans or the risk of not being able to cover your monthly bills so please double check your monthly budget .

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