Monthly Payment
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Month Payment ($) Principal ($) Interest ($) Balance ($)
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Categories: Calculator , Finance
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Loan amortisation distributes a fixed-rate personal loan into equal periodic payments. Each instalment simultaneously covers accrued interest and reduces principal, transforming a large upfront debt into predictable, time-bound cash flows that decline the outstanding balance to zero by an agreed maturity date. Understanding the split between principal and interest helps borrowers gauge total cost and compare offers effectively.

This interactive calculator accepts your loan amount, annual interest rate, and term in years or months, then uses the standard amortisation formula to compute a baseline monthly payment. You can model early-repayment strategies by adding recurring or one-off extra payments, and instantly see updated figures, a downloadable amortisation schedule, and four responsive charts that visualise balance, interest accumulation, and payment composition.

For example, on a $15 000 loan at 7 % for three years, adding $50 to each payment shows how you can shave several months off the payoff date and save hundreds in interest charges, all before signing any paperwork. Figures are approximate and depend on lender rounding and fees; confirm final terms with your provider.

Technical Details:

The time-value of money principle states that borrowing today incurs a cost represented by interest, calculated as a percentage of the remaining balance over discrete compounding periods. Amortisation applies this principle by using geometric series mathematics to spread repayment uniformly. Key variables include principal (P), nominal annual rate (ra), monthly rate (r), number of periods (n), and any extra payments (E) that alter the repayment trajectory. Visualisation of balance decay and cumulative interest provides intuitive feedback for strategic decisions.

Monthly payment formula
M= P⁢r 1−1+r−n
  • P – principal (loan amount)
  • r – monthly interest rate (ra/12)
  • n – total months in term
  • M – required monthly payment without extras
Term Stage Interest Share of Payment Interpretation
Early (0–25 %) 60–80 % Interest dominates; balance falls slowly.
Middle (25–75 %) 20–60 % Principal overtakes interest gradually.
Late (75–100 %) <20 % Rapid principal reduction, minimal interest.
ParameterMeaningUnit/DatatypeTypical Range
principalOriginal loan balance$1 000–100 000+
annual rateNominal yearly interest%3–30 %
term years/monthsRepayment durationinteger6–84 months
extra monthlyRecurring top-up$0–principal
extra annualYear-end top-up$0–principal
lump sumOne-off payment$0–principal

Base scenario (P = 15 000, ra = 7 %, n = 36 months):

r=0.07÷12=0.0058333 M=15000⁢0.00583331−1+0.0058333−36≈463.16 Month 1 interest:15000⁢0.0058333=87.50 Month 1 principal:463.16−87.50=375.66
  • Constant interest rate; refinancing alters results.
  • No late-payment fees or compounding outside monthly periods considered.
  • Extra payments are applied fully to principal immediately.
  • Rounding performed to two decimals; lender rounding rules may differ.
  • Zero interest produces straight-line principal reduction.
  • Extra payments exceeding balance accelerate payoff to the next period.
  • Very long terms (>40 years) may exceed numeric precision.
  • Entering negative values yields undefined behaviour.

Calculations follow the amortisation model described in “Financial Mathematics: A Comprehensive Treatment” (2022) and align with the Consumer Financial Protection Bureau’s repayment examples. The geometric-series derivation mirrors the formula outlined by the International Actuarial Association.

No personal data or identifiers leave your device, satisfying common privacy regulations such as GDPR.

Step-by-Step Guide:

Follow these steps to create a custom repayment scenario.

  1. Enter the Loan amount you wish to borrow.
  2. Provide the Annual interest rate quoted by your lender.
  3. Set the Term using years and, if necessary, extra months.
  4. (Optional) Expand the advanced panel to add recurring or one-off extra payments.
  5. The calculator refreshes instantly; review the monthly payment and badges above the form.
  6. Switch between tabbed views to inspect the amortisation table or interactive charts.
  7. Select “Download CSV” to export the full payment schedule for offline analysis.

FAQ:

Which formula is used?

The tool applies the standard fixed-rate amortisation equation used by banks and regulators worldwide.

Can I model extra payments?

Yes—enter recurring monthly, annual, or one-off lump sums to see how they shorten the term and cut interest.

Does it support variable rates?

No. For rate changes you must run separate scenarios and compare outcomes manually.

Is my data stored?

No information is transmitted or retained; everything runs entirely within your browser session.

Why is my lender’s quote different?

Lenders may include fees, different rounding rules, or daily compounding; consult your documentation for exact figures.

Glossary:

Amortisation
Gradual repayment of debt through scheduled instalments.
Principal
Outstanding loan balance before interest.
Interest
Cost of borrowing, expressed as a percentage of balance.
Term
Total duration of the loan agreement.
Extra Payment
Additional money sent beyond the scheduled amount to reduce balance faster.

No data is transmitted or stored server-side.