Knowing How to calculate loan payment with an online calculator would be very helpful. Different from the conventional calculator, the online calculator has such kind of program that allows you to just input the numbers and get it calculated automatically. The system would also prevent you from making wrong calculation. You just need to follow the following steps to calculate the loan payment using an online calculator.
Choose the online calculator
There are some online calculators available online. You can even download some of them and open it with Excel or Google Drive. As another alternative, there are some links you can open. First, the Bankrate or the MLCcare. Both are very simple calculators that would show you an easy table where you can input your payment schedule and your remaining debt. Second, it is the more complex calculator, the CalculatorSoup. This online calculator is a semi-annually that would allow you calculate the payment, interest, and any remaining debt. CalculatorSoup is better for business. In some cases, you can just make your own calculator by duplicating the format from the online calculator to an Excel spreadsheet.
Try the simple one
For starter to learn How to calculate loan payment, we are going to try the simple one. The basic steps are quite simple as follows:
Input the loan amount.
The loan amount is the total number of the money you borrow in a field that is usually labeled as “base amount”. If it is a partially paid loan, you should enter the rest of money you must pay.
Input the interest.
You must know exactly the interest rate. It is actually the current annual interest rate of your loan. The interest is usually shown in percentage form. For example, your interest rate is a 5%, so you type 5 on the calculator. The calculator would calculate your loan with annual interval. If the interest rate changes, you just need to re-calculate the loan.
Input the loan term
The loan term is usually determined by the time or interval you plan to pay off the loan. The calculator normally use monthly interval. It means you should carefully read the label of the field before entering the loan term.
Input the start date
The start date would be field where you have to enter the date when you will have finished paying off your loan. Then, you can just hit the calculator.
Reading the result
The result of the calculation would be displayed in the form of chart, table, or graphic. Some online calculators would allow you to change how the data is displayed into different form. For example, if it initially shows the result in a form of a chart, you can just change it into a graphic to make you easier to read it.
The calculator would display the information of the “fully amortized” schedule of the loan payment. It means you would get an exact schedule and amount of money you must pay every month. If you pay less than the result of the calculation, you would have to pay some extra interest or extra money in the next interval. Surely, knowing How to calculate loan payment makes you feel like having a great accountant.
