David Chen is a Certified Financial Analyst with over 10 years of experience in financial planning and loan management.
Enter the necessary values to compare different loan terms and make an informed decision.
Loan Term Comparison Calculator
Loan Term Comparison Formula
Monthly Payment = (Loan Amount × Interest Rate) / (1 – (1 + Interest Rate)^-Loan Term)
Formula Source: Investopedia
- Loan Amount: The total amount of the loan.
- Interest Rate: The annual interest rate (as a percentage).
- Loan Term: The length of the loan in years.
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What is Loan Term Comparison?
Loan term comparison is a way of evaluating different loan terms (such as 15 years vs. 30 years) to determine how the term length affects monthly payments and the total interest paid over the life of the loan.
How to Calculate Loan Term Comparison (Example)
- Step 1: Enter the loan amount, interest rate, and loan term.
- Step 2: Click “Calculate” to see your monthly payment.
- Step 3: Compare the monthly payments for different loan terms.
Frequently Asked Questions (FAQ)
How does loan term affect monthly payments? A longer loan term generally results in lower monthly payments, but you pay more in interest over time.
Can I change the loan term after getting a loan? Many lenders allow you to refinance your loan to change the term.
What is the best loan term? The best loan term depends on your financial situation, balancing monthly payments and the total interest cost.