How to use it
- Enter Loan amount.
- Enter Annual rate %.
- Enter Term (years).
The formula
M = PĀ·r(1+r)āæ / ((1+r)āæā1)
Worked example
A $15,000 loan at 11% over 4 years costs about $388/month.
Frequently asked questions
Is the rate fixed?
This assumes a fixed rate for the whole term.
What raises the rate?
Lower credit scores and longer terms usually cost more.
Tips
- A shorter term costs less overall even if the payment is higher.
- Check the APR, not just the rate, to compare fairly.
- Read the fine print for fees and prepayment penalties.
Key terms
- APR
- Yearly cost including fees, as a percentage.
- Term
- How long you repay the loan.
- Collateral
- An asset securing the loan.