Formula guide

Loan Calculator formula

The calculator uses the standard amortizing loan payment formula. It converts the annual interest rate into a monthly rate, then calculates a fixed monthly payment based on the loan amount and loan term. That payment includes both principal and interest.

How the input values are used

Loan amount (USD)

The numeric value in USD is used in the calculation; keep units consistent.

Annual interest rate (%)

The numeric value in % is used in the calculation; keep units consistent.

Loan term (years)

The numeric value in years is used in the calculation; keep units consistent.

How to interpret the result

  • The result uses Loan amount (USD) and Annual interest rate (%). Change one variable at a time to compare its effect on the outcome.
  • Check whether relevant fees, taxes, and timing assumptions are included before using the estimate.
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