Loan Calculator

How to Use This Calculator

1. Enter your loan amount
2. Specify the annual interest rate
3. Set your loan tenure in years
4. Select the compounding frequency
5. Select the repayment frequency
6. Click the calculate button to see your results

Features

• Calculate loan repayment schedule
• View complete amortization schedule
• See principal and interest breakdown
• Track remaining loan balance
• Visualize payment distribution
• Compare principal vs interest payments

Important Considerations

• Interest rates may vary based on credit score and loan type
• Additional fees and charges may apply
• Early repayment options may be available
• Consider your monthly budget before taking a loan
• Compare different loan offers before making a decision

Frequently Asked Questions

• What is a periodic loan payment?

• A periodic loan payment (sometimes called an installment) is a fixed amount you pay to your lender at regular intervals (monthly, quarterly, annually, etc.). Each payment includes both interest and a portion of the principal, allowing you to repay your loan over a set period in manageable installments.

• What factors affect my loan payment?

• The loan amount is the total sum you borrow; a higher amount results in a higher payment.
• The interest rate is the percentage charged by the lender on the principal; a higher rate increases your payment.
• The loan tenure is the period over which you repay the loan; a longer tenure reduces each payment but increases total interest paid.
• The type of interest (fixed or floating) determines whether your payment remains constant or can change over time based on market rates.

• What is an amortization schedule?

• An amortization schedule is a detailed table that shows each periodic loan payment, breaking down how much goes toward interest and how much toward principal. It helps you track your loan balance, interest paid, and principal repaid over the life of the loan.

• How can I reduce my loan payment?

• Increasing the loan tenure spreads your repayments over a longer period, reducing each payment but increasing total interest paid.
• Making a larger down payment reduces the principal amount borrowed, which lowers your payment.
• Negotiating a lower interest rate with your lender can directly reduce your payment and the total interest paid.
• Choosing a different loan type or switching to a lender with better terms can also help lower your payment.

• What is repayment frequency?

• Repayment frequency refers to how often you make payments toward your loan, such as monthly, quarterly, semi-annually, or annually. More frequent repayments can reduce the total interest paid and help you pay off your loan faster.

• What is compounding frequency?

• Compounding frequency is how often the interest is calculated and added to your outstanding loan balance. The more frequently interest is compounded (monthly, quarterly, etc.), the more interest you may pay over the life of the loan.

• How do repayment and compounding frequencies affect my loan?

• If your repayment frequency is less frequent than your compounding frequency, you may end up paying more interest overall. Making repayments more frequently than interest is compounded can help reduce the total interest paid.

• Can I choose any combination of repayment and compounding frequency?

• Some lenders may restrict the available options for repayment and compounding frequencies. Always check your loan agreement or consult your lender to understand which combinations are allowed for your loan product.

• How is the periodic payment calculated for different repayment frequencies?

• The payment calculation takes into account both the compounding and repayment frequencies. The calculator uses the effective interest rate per repayment period, derived from the annual rate and compounding frequency, to ensure accurate payment and amortization schedule calculations for any combination of options.

• Which repayment frequency should I choose?

• Choosing a more frequent repayment schedule, such as monthly, usually results in lower total interest paid over the life of the loan, but requires more frequent payments. Select a frequency that matches your cash flow and financial planning needs.

• What is the difference between principal and interest?

• The principal is the original loan amount you borrow, while interest is the cost of borrowing that amount. Each payment you make includes both principal and interest components, with the interest portion typically higher at the start of the loan and decreasing over time.

• Can I prepay my loan?

• Check your loan agreement for prepayment terms, as some loans allow you to pay off your loan early without penalty, while others may charge a fee.
• Some loans have prepayment penalties, so it's important to understand the costs before making extra payments.
• Prepaying your loan can reduce the total interest cost and help you become debt-free sooner.
• Consider partial prepayment options if you cannot pay off the entire loan at once; even small extra payments can save you money over time.

• What should I consider before taking a loan?

• Evaluate your monthly income and expenses to ensure you can comfortably afford the loan repayments without straining your budget.
• Consider your existing debt obligations, as taking on too much debt can affect your credit score and financial stability.
• Check your credit score and history, as these can impact your eligibility and the interest rate offered by lenders.
• Think about your future financial goals and whether taking a loan aligns with them.
• Maintain an emergency fund to cover unexpected expenses, so you don't fall behind on loan payments in case of financial hardship.

• What are the different types of loans?

• There are various types of loans available to meet different financial needs and purposes. Some of the most common types include home loans (for purchasing property), personal loans (for general expenses), auto/car loans (for buying vehicles), education loans (for funding studies), business loans (for business needs), gold loans (secured by gold), loans against property, credit card loans, payday loans, and consumer durable loans (for appliances and electronics).

• What is the difference between secured and unsecured loans?

• Secured Loans: These loans are backed by collateral, such as a house, car, or gold. If the borrower defaults, the lender can claim the collateral to recover the loan amount. Secured loans usually have lower interest rates and higher borrowing limits.
• Unsecured Loans: These loans do not require any collateral. Approval is based on the borrower's creditworthiness, and interest rates are usually higher than for secured loans. Examples include personal loans, credit card loans, and payday loans.