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The monthly payment formula calculates how much a loan payment will be and includes the loan's principal and interest. When you receive a loan from a lender, you receive an amount called the principal, and the lender tacks on interest.
The loan payment formula shown is used for a standard loan amortized for a specific period of time with a fixed rate. Examples of specialized loans that do not apply to this formula include graduated payment, negatively amortized, interest only, option, and balloon loans.
Use this loan calculator for a simple calculation of your monthly payment along with interest paid on the loan. Create and print a loan amortization schedule. This calculator assumes interest compounding occurs monthly.
Use our loan payment calculator to calculate your monthly payment and interest, plus learn the loan payment formula and steps to calculate.
Monthly Payment. The amount to be paid toward the loan at each monthly payment due date. Compounding. This calculator assumes interest compounding occurs monthly as with payments. For additional compounding options use our Advanced Loan Calculator. Loan Calculations.
For instance, you can use the amortizing loan equation to calculate the monthly payment for an auto loan, student loan, home equity loan or fixed-rate mortgage. Or, you can use the interest-only formula to calculate the monthly payment for a balloon loan or interest-only mortgage.
The loan payment calculator is a handy tool to compute the required monthly (or any other frequency) payments after taking a loan requiring equal payments. For example, you can estimate your car payment or mortgage installments.
Senior Assigning Editor. Fact Checked. Use this loan calculator to determine your monthly payment for any loan. You can also see how your loan amortizes, or how much is paid down, over...
The type of loan (interest-only or amortizing) will determine the loan payment formula and how interest is calculated. Using a loan calculator can help determine the exact monthly...
Loan Payment Formula. Borrowers can use the loan payment formula to calculate the monthly payment of a loan. You’ll need to know the interest rate, loan amount and loan term.