How to Calculate Loan Payments
Understanding your monthly commitment is crucial before signing any loan agreement. Our calculator uses the standard amortization formula to determine exactly how much goes towards principal versus interest.
The Formula
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
- P = Principal Loan Amount
- i = Monthly Interest Rate (Annual Rate / 12)
- n = Total Number of Months