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Loan Repayment Calculator

Thinking about taking out a personal loan? Our loan repayment calculator will keep you from borrowing more than you can repay.

Personal loans can be a useful financial tool, and put cash in your pocket when you need it most. But like any borrowing, a loan is not without risks. Before taking one out, you should be confident that you can repay it. Using a personal loan repayment calculator can help you weigh the pros and cons of taking out a loan and determine how much you should borrow. 

Amplify Credit Union’s loan repayment calculator allows you to evaluate the following aspects of a new personal loan:

  • Maximum monthly payment
  • Total loan amount
  • Loan rate
  • Loan term

By understanding your limits for each of these variables, you are better equipped to decide whether a personal loan is for you. For more information on the terms used on this calculator, refer to the section below the tool.

Important Terms to Know for the Loan Repayment Calculator

Here are some helpful terms to know to help you use the loan repayment calculator. 

Amortization table

You’ll notice an amortization table on the calculator. The word amortization sounds fancy, but it simply refers to the process of paying off debt over time through regular payments that cover both the principal and interest.

The calculator table shows you how much goes towards your principal and how much goes towards the interest with each payment you make. Amortization tables (also called amortization schedules) are based on a specific maturity date— aka your loan term. As time goes on, you’ll notice that less of your payment goes towards interest and more goes towards the principal balance. 

Monthly loan payment

Loans are repaid through monthly installments. Payments consist of two parts: principal and interest. The principal balance is the amount that you initially borrowed. 

Your monthly loan payment is what you should really pay attention to when trying to decide whether or not a personal loan is right for you. Do you have the funds to pay this amount every month and still cover all of your other monthly expenses and obligations? Missing payments on your personal loan can cause you to rack up late fees, harm your credit score, or have your account sent to collections. 

Loan amount

The loan amount is simply how much you are borrowing. The larger your loan amount, the more you’ll pay in both principal and interest. Loans also come with other expenses, like closing costs, but only consider the initial sum for this calculator.

Loan rate

The interest rate, sometimes referred to as the loan rate, is what a lender charges you in exchange for being able to borrow their money. With personal loans, the rate is fixed, meaning it doesn’t change over time. It’s calculated as a percentage of your total loan amount and added to the loan’s principal balance.

With most types of loans like personal loans and mortgages, interest compounds, meaning that you’ll end up paying more than just X% on the total loan amount. 

What does this mean for the borrower? Say you have two loans for the same amount with the same interest rate, but one has a 24-month term and the other a 60-month term. Because you are borrowing over a longer period with the 60-month loan, the interest has more time to compound, meaning you’ll pay more.

Your interest rate is set by the bank but can vary depending on several factors. Generally speaking, the higher your loan’s risk to a lender, the higher your interest rate will be. Things that can affect the rate you get include:

  • Your credit score: This three-digit number tells lenders about your creditworthiness. It is based on your credit report, which is information sourced from the three major credit bureaus. 
  • Debt-to-income ratio: The debt-to-income ratio tells lenders how much of your monthly income pays off other debts. A lender will be hesitant to lend money to you if you owe money to other banks. 
  • Employment history and income: A lender wants to know that you make enough each month to make the monthly payment. 
  • The loan term: Loans with longer terms may have higher interest rates. 
  • The loan amount: The more money you are borrowing, the greater the risk for the lender. Because of this, larger loans may pack a higher interest rate.
  • Whether or not the loan is secured with collateral: Oftentimes, personal loans backed by collateral - such as a car - have a lower interest rate. It lessens the lender’s risk since they can seize the property if the borrower defaults. Unsecured loans may carry a higher rate.

Loan term (number of months)

The loan term is the time period during which you pay off your loan. Typically, you can find personal loans with terms anywhere between 12 and 60 months. As we mentioned in the “Loan Rates” section, if you pay off your loan over a short term, your payments will be larger.

However, you won’t pay as much interest over the course of the loan. On the other hand, a longer-term loan means smaller monthly payments— but you’ll pay more in interest overall. 

Extra principal payment

An extra principal payment is an additional money that you use to pay down your loan balance, in addition to the required monthly payment. Making extra payments towards your principal loan balance can save you in interest payments and allow you to pay off your personal loan faster.

Notice how moving the extra payment slider affects the amortization table. Even putting a little extra towards the principal each month can allow you to pay off your loan months ahead of schedule. 

More Financial Resources

Looking for more helpful tools like the loan repayment calculator? There’s more where that came from. Amplify Credit Union offers a series of calculators to help you with everything from college savings to home buying to retirement. Planning is just one of the important ways that you can ensure a secure financial future.

Explore Our Personal Loan Products

From installment loans to lines of credit, discover the lending options available to you at Amplify Credit Union.

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