If you’ve been thinking about borrowing money and are curious to see what payments would look like before you apply, a loan calculator can be an ideal tool to help you figure this out.
Bankrate’s loan calculator was designed to help borrowers calculate amortized loans. These are mortgages, auto loans, student loans and other types of personal loans that are paid off in regular installments over time, with fixed payments covering both the principal amount and interest. Our calculator shows you the total cost of a loan, expressed as the annual percentage rate, or APR. Enter the loan amount, term and interest rate in the fields below and click calculate to see your personalized results.
The cost of a loan depends on the type of loan, the lender, the market environment, your credit history and income. Before shopping for loans, it’s important to check your credit score, as this will help you narrow down your search to lenders that offer loans to borrowers within your credit profile. That said, to secure the best interest rates, you’ll need to have good to excellent credit (a FICO score of 740 and above).
Before shopping for any loan, it’s a good idea to use a loan calculator. A calculator can help you narrow your search for a home or car by showing you how much you can afford to pay each month. It can help you compare loan costs and see how differences in interest rates can affect your payments, especially with mortgages. An interest rate calculator, on the other hand, can help you determine how big of a payment you should be making each month to reduce how much you pay on interest. Using a calculator when borrowing money is crucial to make good financial decisions.
Calculators for loan types
Here are some details about the most common types of loans and the loan calculators that can help you in the process.
Mortgage
Bankrate’s mortgage calculator gives you a monthly payment estimate after you input the home price, your down payment, the interest rate and length of the loan term. Use the calculator to price different scenarios. You might discover you need to adjust your down payment to keep your monthly payments affordable. You can also see the loan amortization schedule, or how your debt is reduced over time with monthly principal and interest payments. If you want to pay off a mortgage before the loan term is over, you can use the calculator to figure out how much more you must pay each month to achieve your goal.
Other mortgage calculators can answer a variety of questions: What is your DTI, or debt-to-income ratio? That’s a percentage that lenders look at to gauge your debt load. Should you take out a 15-year mortgage or a 30-year? Fixed interest rate or variable?
It’s critical to nail down the numbers before buying a home because a mortgage is a loan that is secured by the home itself. If you fail to make the monthly payments, the lender can foreclose and take your home.
Home equity loan
Home equity loans, sometimes called second mortgages, are for homeowners who want to borrow some of their equity to pay for home improvements, a dream vacation, college tuition or some other expense. A home equity loan is a one-time, lump-sum loan, repaid at a fixed rate, usually over five to 20 years. Bankrate’s home equity calculator helps you determine how much you might be able to borrow based on your credit score and your LTV, or loan-to-value ratio, which is the difference between what your home is worth and how much you owe on it.
Home equity line of credit (HELOC)
A HELOC is a home equity loan that works more like a credit card. You are given a line of credit that can be reused as you repay the loan. The interest rate is usually variable and tied to an index such as the prime rate. Our home equity calculators can answer a variety of questions, such as:
- Should you borrow from home equity?
- If so, how much could you comfortably borrow?
- Are you better off taking out a lump-sum equity loan or a HELOC?
- How long will it take to repay the loan?
Auto loan
An auto loan is a secured loan used to buy a car. The auto loan calculator lets you estimate monthly payments, see how much total interest you’ll pay and the loan amortization schedule. The calculator doesn’t account for costs such as taxes, documentation fees and auto registration. Plan on adding about 10 percent to your estimate.
Student loan
A student loan is an unsecured loan from either the federal government or a private lender. Borrowers must qualify for private student loans. If you don't have an established credit history, you may not find the best loan. Bankrate’s college savings calculator will show you how long it will take to pay off your loan and how much interest it will cost you. The college savings calculator will help you set savings goals for the future.
Personal loan
A personal loan is an unsecured, lump-sum loan that is repaid at a fixed rate over a specific period of time. It is a flexible loan because it can be used to consolidate debt, pay off higher-interest credit cards, make home improvements, pay for a wedding or a vacation, buy a boat, RV or make some other big purchase. The personal loan calculator lets you estimate your monthly payments based on how much you want to borrow, the interest rate, how much time you have to pay it back, your credit score and income.
If you have some combination of good to excellent credit, a low debt-to-income ratio, steady income and assets, you can probably qualify for most types of loans. Use loan calculators to answer your questions and help you compare lenders so you get the best loan for your financial situation.
Secured vs. unsecured loans
Secured loans require an asset as collateral while unsecured loans do not. Common examples of secured loans include mortgages and auto loans, which enable the lender to foreclose on your property in the event of non-payment. In exchange, the rates and terms are usually more competitive than for unsecured loans.
Unsecured loans don’t require collateral, though failure to pay them may result in a poor credit score or the borrower being sent to a collections agency. Common types of unsecured loans include credit cards and student loans.
Loan basics to know
When taking out any loan, it’s important to understand these four factors:
- Interest rate: An interest rate is the cost you are charged for borrowing money. This rate is charged on the principal amount you borrow.
- APR: The APR on your loan is the annual percentage rate, or cost per year to borrow, which includes interest and other fees. You can use Bankrate’s APR calculator to get a sense of how your APR may impact your monthly payments.
- Repayment term: The repayment term of a loan is the number of months or years it will take for you to pay off your loan. Your loan’s principal, fees, and any interest will be split into payments over the course of the loan’s repayment term.
- Principal: The principal is the amount you borrow before any fees or accrued interest are factored in.
