What's My Payment Calculator

Loan Payment Formula:

\[ PMT = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1} \]

Monthly Payment (PMT):

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1. What is the Loan Payment Calculator?

The Loan Payment Calculator helps you determine your monthly payment for any loan using the standard amortization formula. It calculates how much you'll pay each month based on your loan amount, interest rate, and loan term.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

\[ PMT = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1} \]

Where:

$ PMT $ — Monthly payment ($/month)
$ P $ — Principal loan amount ($)
$ r $ — Monthly interest rate (annual rate ÷ 12)
$ n $ — Total number of payments (months)

Explanation: This formula calculates the fixed monthly payment required to fully pay off a loan over its term, including both principal and interest components.

3. Importance of Payment Calculation

Details: Knowing your exact monthly payment helps with budgeting, comparing loan offers, and understanding the total cost of borrowing. It's essential for financial planning and avoiding payment surprises.

4. Using the Calculator

Tips: Enter the loan amount in dollars, annual interest rate as a percentage (e.g., 5.25 for 5.25%), and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is included in the monthly payment?
A: The calculated payment includes both principal and interest. It does not include property taxes, insurance, or other fees that may be part of your total payment.

Q2: How does interest rate affect my payment?
A: Higher interest rates significantly increase your monthly payment and total loan cost. Even a 0.5% difference can amount to thousands over the loan term.

Q3: What's the difference between 15-year and 30-year loans?
A: 15-year loans have higher monthly payments but much less total interest paid. 30-year loans have lower monthly payments but significantly more total interest.

Q4: Can I calculate payments for different loan types?
A: Yes, this calculator works for mortgages, auto loans, personal loans, and student loans that use standard amortization.

Q5: What if I make extra payments?
A: Extra payments reduce your principal faster, potentially saving thousands in interest and shortening your loan term.