David Chen is a Certified Financial Analyst with over 10 years of experience in insurance and financial planning.
Use the loan amortization calculator to calculate the missing variable for your loan. Input three variables, and the fourth will be calculated automatically.
Loan Amortization Calculator
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Loan Amortization Formula
Loan Amount (F) = Payment (P) * [(1 – (1 + Interest Rate (V))^-Term (Q)) / Interest Rate (V)]
Variables:
- Loan Amount (F): The total amount of the loan.
- Payment (P): The monthly payment made on the loan.
- Interest Rate (V): The interest rate for the loan.
- Term (Q): The term of the loan in years.
Related Calculators
What is Loan Amortization?
Loan amortization refers to the process of paying off a loan over time through regular payments. Each payment covers the interest and a portion of the principal balance. Over time, the portion that goes towards interest decreases, and the portion that goes towards principal increases.
How to Calculate Loan Amortization (Example)
- Step 1: Enter the loan amount, interest rate, payment, and term.
- Step 2: Click “Calculate” to compute the missing variable.
- Step 3: Review the results and calculation steps.
Frequently Asked Questions (FAQ)
What is amortization? Amortization is the process of gradually paying off a loan over a period of time with scheduled payments.
Can I calculate the total interest on my loan? Yes, total interest can be calculated based on the loan amount, interest rate, and term.
How does my payment affect my loan term? Higher payments reduce the loan term, while lower payments increase the time it takes to pay off the loan.