# Loan Calculators

Use these calculators to work out repayment figures for personal loans, student loans, auto loans or any other type of credit agreement. The first calculator breaks down monthly repayments for a secured or unsecured loan. The second calculator helps you work out how long it will take to pay off your loan.

#### Disclaimer

Whilst every effort has been made in building these loan payment calculators, we are not to be held liable for any special, incidental, indirect or consequential damages or monetary losses of any kind arising out of or in connection with the use of the calculator tools and information derived from the web site. These tools are here purely as a service to you, please use them at your own risk.

The calculations given by the loan payment calculators are only a guide. Please speak to an independent financial advisor for professional guidance. Read the full disclaimer.

## What is a secured loan?

A secured loan is a loan in which the borrower pledges an asset (e.g. a car or property) as collateral for the loan. Due to the fact that you are borrowing money against an asset you own, the interest rates tend to be a lot lower than with unsecured loans. That said, the risks can be higher due to the fact that your asset can be repossessed if you do not keep up repayments.

## What is an unsecured loan?

Unsecured loans are monetary loans that are not secured against the borrower's assets. These often take the form of credit card debt, personal loans, bank overdrafts, credit facilities or corporate bonds. You can learn more about unsecured loans in this article from Investopedia.

## What is a balloon payment?

A balloon payment is a large, lump-sum payment made at the end of a long-term loan. It is commonly used in car finance loans as a way of reducing monthly repayment figures. Be aware that once you reach the end of your loan period, that balloon amount becomes payable. More information about balloon payments is available in our article, What is a balloon payment?

## What is the effective annual rate?

The effective annual rate is the actual interest rate that you pay on a loan if the loan is affected by compounding. This loan calculator compounds interest on a monthly basis.

## What is APR?

APR stands for Annual Percentage Rate and is an important factor in determining the overall cost of a loan. You can use APR to compare different
personal loan offers. When you arrange a loan with a finance company, their offer can include **extra fees** associated with the loan. The APR figure
takes that information into account, giving you a simple percentage interest rate to allow you to compare and shop around. For information on interest rates
and APR, see our article What is APR?

## What is the formula for the loan payment calculator?

The loan calculator uses the following formula to calculate loan figures:

**Monthly payment = [ r + r / ( (1+r) ^ months -1) ] x principal loan amount**

Where: r = decimal rate / 12.

**Example**:

For repaying a loan of $1000 at 5% interest for 12 months, the equation would be:

Monthly payment = [ (0.05 / 12) + (0.05 / 12) / ( (1+ (0.05 / 12)) ^ 12 -1) ] x principal loan amount

Monthly payment = [ 0.0041666667 + 0.0041666667 / (1.0041666667 ^ 12 - 1)] x 1000.

Monthly payment = [ 0.0041666667 + 0.0041666667 / (1.0511618983 - 1)] x 1000.

Monthly payment = [ 0.0041666667 + 0.0041666667 / 0.0511618983] x 1000.

Monthly payment = [ 0.0041666667 + 0.081440816] x 1000.

Monthly payment = 0.085607483 x 1000.

Monthly payment = 85.607483.