Steps to Use the Loan Calculator

The steps to use the online loan calculator:

Step 1: Enter the loan amount, interest rate and loan term in the space provided

Step 2: Click on “Solve” to obtain the loan payment value per month.

Step 3: Output will be displayed.

Loan

A loan is an agreement amongst a borrower and a lender in which the borrower receives an amount of money (principal amount) that has to be paid back later. A loan is money, property, or other material goods given to another party in exchange for future repayment of the loan value or principal amount, along with interest or finance charges. A loan may be for a specific, one-time amount, or it can be available as an open-ended line of credit up to a specified limit. In short, a loan is a contract between a borrower and a lender in which the borrower receives an amount of money (principal) that they are obligated to pay back in the future. Loan Calculator is a free online tool that helps find the loan amount to be paid on monthly for the given input values such as loan amount, term, interest rate.

Loan Balance Formula

The formula used to find the loan balance during the tenure of the loan is:

B=A(1+r)n−p/r[(1+r)n−1]

Here, in the above equation,

B = Loan Balance

A = Loan amount

r = Interest rate per month

n = Tenure in months

p = Monthly payment