Loan Calculator
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
Are you looking for a home loan or a car loan? Are you confused about the right amount of loan that will be affordable, considering your current income? Are you looking for tools to cross check loan terms? A loan calculator can help you identify the most economical loan deal and can be a crucial tool for all your financing needs.[br]
Right from calculating the monthly payment to estimating the right loan amount, loan calculators can make life much easier for borrowers. Though their usual application is calculating the monthly payment and comparing different loans, they can also be used for cross-checking interest rates and duration of the loan. Their working process is extremely simple and verifiable. In fact, borrowers can also generate their own payment calendar in Excel if they wish to.
Excel and Loan Calculator
Though there are many virtual loan calculators available, borrowers can also use Excel for calculating their monthly payments. One can simply use the ‘PMT’ formula (in-built in Excel) to calculate monthly payment or define a new formula to calculate the same. For defining a new formula, follow the steps mentioned here:
· Create six columns and name them Principal, Interest Rate Per Month, Duration in Months, Numerator, Denominator and the Monthly Payment.
· Convert the interest rate to months and multiply the number of years by 12, to get the number of months in the total loan duration.
· Type the principal amount, interest rate per month and the number of months in the corresponding rows and columns.
· Copy-paste the following formula in the fourth, fifth and the sixth column respectively: =A2*B2*(1+B2)^C2’, ‘=(1+B2)^C2-1’, ‘=D2/E2[br]
Once the worksheet is ready, you only need to fill in the fields and the calculations will be done automatically. If you want to compare a couple of loans on the basis of their monthly payments, simply press ‘Control-D’ under the fourth, fifth and the sixth column. Repeat this for any number of rows. With this sheet, borrowers can also cross check the loan calculators available online.
Similarly, borrowers can also generate loan calculators that can compute interest rates, loan duration or even estimate the viability of taking a loan. However, borrowers who are not much aware of Excel can use online loan calculators.
