Finance
Loan Calculator: Compare Loans and Find the Best Rate
Understand loan calculations, compare options, and learn strategies to pay off debt faster.
A loan calculator reveals the true cost of borrowing.
Payment Formula
M = P[r(1+r)^n]/[(1+r)^n-1]. Principal, monthly rate, and number of payments.
APR vs Interest Rate
APR includes fees, giving the true borrowing cost. Always compare loans using APR.
Pay Off Faster
- Biweekly: 13 payments per year instead of 12
- Round up: Extra goes to principal
- Extra payments: Significantly reduce interest
- Refinance: Lower rate saves thousands
Avalanche vs Snowball
Avalanche targets highest interest (mathematically optimal). Snowball targets smallest balance (psychological wins).
Frequently Asked Questions
How is interest calculated?
On remaining principal each month. As balance decreases, less interest accrues.
Can I pay off early?
Most loans allow it. Check for prepayment penalties.
What is debt consolidation?
Combining multiple debts into one loan at a lower rate.