Question 1

How do I calculate monthly loan payments?

Accepted Answer

Monthly loan payments are calculated using the standard amortization formula: M = P * [r(1+r)^n] / [(1+r)^n – 1], where M is monthly payment, P is principal, r is monthly interest rate, and n is number of payments. Our calculator handles this automatically - just enter loan amount, interest rate, and term.

Question 2

How do extra payments affect my loan?

Accepted Answer

Extra payments directly reduce the principal balance, which saves interest and shortens the loan term. For example, adding $50/month to a $20,000 loan at 7.5% can save thousands in interest and pay off the loan months or years earlier. Our calculator shows exact savings and new payoff date.

Question 3

Should I refinance my loan?

Accepted Answer

Refinancing makes sense if the new loan's interest rate is significantly lower, you can shorten the term, or you need to change loan terms. Use our refinance mode to compare your current loan with a new option. The breakeven analysis shows when refinancing pays off after accounting for closing costs.

Question 4

How do I compare different loan offers?

Accepted Answer

Use our comparison mode to evaluate up to 3 loan options side-by-side. Compare monthly payments, total interest costs, and payoff dates. Look beyond just the interest rate - consider total cost, monthly payment affordability, and loan term. The calculator highlights which loan saves the most money.

Question 5

What is an amortization schedule?

Accepted Answer

An amortization schedule shows how each payment is split between principal and interest over the life of the loan. Early payments are mostly interest, while later payments are mostly principal. Our calculator generates a detailed month-by-month schedule showing payment breakdown, remaining balance, and cumulative interest paid.

Loan Calculator - Monthly Payments & Refinance Analysis

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