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Easily calculate loan interest, monthly payments and total interest paid upon balance payoff. Also see our new home loan calculator, mortgage refinance calculator and our credit card interest calculator.
How to use our loan calculator: In the first box, enter the loan repayment duration in months (1 year = 12 months, etc). In the next box, input the interest rate provided by the lender (if you have not yet been given an interest rate, enter an estimate). In the third box, type in the amount of money to be borrowed. Finally, click on the "Calculate Loan Payments" button to be shown your monthly payments and the loan interest total.
About loan interest - Author: Credit Federal: Interest represents the money borrowers pay to lenders for credit over a specified period of time. The amount of interest paid depends on the loan dollar amount, the length of time for re-payment, the annual rate of interest, the repayment schedule, and the method used to calculate interest. Need more information? View our other tools to calculate loan interest, and join our online financial newsletter.
Interest Rates
Most consumers want the best interest rates on loans, especially mortgage loans. A mortgage is a big responsibility and is the most common loan families pursue. The length of a mortgage is generally 20-30 years. If a mortgage loan is taken out at age 30 the home could be paid by the age of 60. For that many years, if the interest fees are high, you could pay thousands of dollars in interest. That is why it’s best to seek the a low interest rate for a mortgage loan.
Don't think just because you apply for a mortgage loan you automatically get the best interest rate. It will be up to the borrower to make sure the lowest interest rate will be available for the loan. Check credit scores before applying for any mortgage. A second way to save on interest, is to save a huge down payment so less money is financed for the least amount of years.
Whenever you apply for credit and get turned down, you can get a free credit report. To try to figure out the level of interest rate you will be eligible for, you need to know your FICO score. This score is determined from all the information on your credit report and is a factor that determines the interest rate paid on what is borrowed, what down payment is required, and the length of the mortgage.
A FICO score is a compilation of your payment history, the credit you have, the length of time of different types of credit, and how much credit to debt you have. Scores range from 300-850 and most lenders will not lend to you if you have a score less than 550. Scores between 550 and 649 will get higher interest rates. Usually borrowers with scores above 650 are offered lower interest rates.
FICO scores are not the only determination for a loan. A big down payment lets the lender know you are probably planning on making payments are serious. Also, a bigger down payment will reduce the amount of money needed from a lender.
To get your FICO score, you must request it as a free credit report will not contain this information. It is in your best interest to determine if your score is good enough to get a low interest rate so you may need to purchase this report before applying for a loan. If credit is less than perfect, consider taking time to improve it and apply later for a loan to get the lowest interest rates possible. |
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