Welcome to the Financial Calculator
Sooner or later, all borrowers become repayers, and they have to
make arrangements to pay back their loan. This is usually done by
making equal monthly payments over a predetermined length of time.
Calculating the monthly payment is called amortization . The
mathematical formula used includes such variables as the interest
rate, present value of the loan when the monthly payment calculation
takes place, and the period of time in which the loan is to be
repaid to the lender.
Borrowers often wonder how the monthly payments might change with
a modification of the interest rate? Usually, when interest rates
change, lending institutions will keep the monthly payments constant
and adjust the number of months of repayment. However, this practice
is not always implemented. We would strongly recommend asking your
specific lender how your repayment schedule would be affected should
the interest rate be adjusted during the repayment period.
A second area often questioned has to do with voluntary
accelerated payments whereby the borrower pays more than the
calculated monthly required payment. Normal practice is that an
individual can make payments above and beyond the calculated monthly
payments without penalty. In fact, if you can possibly increase your
monthly payments, your loan will be far less costly down the road.
You can use the following loan calculator to determine your
monthly payment for any of the loan programs we have presented to
you. You can choose your own "Total Amount of Loan" rather than
using the $10,000 amount we used in our examples.
When determining the "Total Amount of Loan" for this calculator,
don't forget to to add to the original principal all the fees and
interest that would be capitalized during the deferment period. Our
examples and comparison chart assume 4 years of deferment where
possible. For "Current Interest Rate" choose the rate specified for
the program you are considering, but recognize that it may well
change during the life of the loan. For "Number of Months of
Repayment" count all months during the period of repayment-- 15
years would be 180 months.
