Loan Calculator
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Amortization Schedule
| Month | Principal Paid | Interest Paid | Remaining Balance |
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🔵 How Loan Calculator Works
A loan calculator helps you estimate your monthly repayment, total payment, and interest cost over the loan period. By entering the loan amount, annual interest rate, and loan term, the calculator instantly shows you:
- Monthly EMI (Equated Monthly Installment)
- Total Payment (Principal + Interest)
- Total Interest Paid over the entire loan
This makes it easier to plan your budget, compare loan offers, and understand how much the loan will really cost you.
🔵 Formula Explanation
Most loans are calculated using the EMI formula:
Where:
P = Loan Amount (Principal)
r = Monthly Interest Rate (Annual Rate ÷ 12 ÷ 100)
n = Total Number of Payments (Years × 12)
The formula ensures that each monthly installment remains the same, while the interest portion decreases and the principal portion increases over time.
🔵 Example
Suppose you borrow $10,000 at an annual interest rate of 5% for 5 years:
- Loan Amount: $10,000
- Annual Interest Rate: 5%
- Loan Term: 5 years (60 months)
Result:
- Monthly EMI = $188.71
- Total Payment = $11,322.74
- Total Interest = $1,322.74
This means you will repay $11,322.74 in total, which includes $1,322.74 in interest.
🔵 FAQs
❓ What is EMI?
EMI (Equated Monthly Installment) is the fixed monthly payment you make towards your loan. It includes both the principal (the original loan amount) and the interest charged by the lender.
❓ How is loan interest calculated?
Loan interest is usually calculated using the reducing balance method, where interest is charged on the remaining principal each month. As you keep paying, the principal reduces, and so does the interest portion.
❓ Can I repay my loan early?
Yes, most lenders allow early repayment or prepayment. This reduces the total interest you pay. However, some banks may charge a small prepayment penalty.
❓ What affects my loan EMI?
Your EMI depends on:
- Loan Amount – Higher loan → Higher EMI
- Interest Rate – Higher rate → Higher EMI
- Loan Tenure – Longer tenure → Lower EMI (but more total interest)