Loan Calculator 2
Fast, accurate and free online loan calculator 2 tool running directly in your browser.
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Loan calculator is an extensive financial tool that allows you to calculate in detail the amount of installments, the total cost of the loan, interest and the impact of overpayments on shortening the repayment period. The user can enter parameters such as amount, interest rate, commissions, loan length, type of installments (equal or decreasing), as well as overpayments and variable interest rates. The results are presented in a clear tabular and numerical form.
How the loan calculator works
The calculator calculates the amount of installments in two systems:
- Equal installments- each installment has the same amount, but the proportion of capital and interest changes.
- Decreasing installments- the capital is repaid evenly, which means that each subsequent installment is lower.
Thanks to this, you can compare which repayment system better fits your household budget and financial plans.
Loan parameters
- Loan amount:amount– total loan amount in the selected currency.
- Loan period:term_years i term_months– total loan repayment time.
- Interest rate: the sum ofbase_pct(e.g. WIRON/WIBOR) andmargin_pct(bank margin).
- Commission: percentage or fixed amount, with loan financing option.
- Life Insurance: A fixed monthly amount or a percentage of the outstanding balance.
- Overpayments: one-off or regular, with the possibility of shortening the period or lowering the installments.
Calculation formulas and methods
The basis for the calculation is the annuity formula:
Installment = K × (r / (1 - (1 + r)^(-n)))
where:
- K – loan amount
- r – monthly interest rate
- n – number of installments
In the system of decreasing installments, the principal is repaid evenly and the interest decreases in proportion to the decreasing loan balance. As a result, the total cost of the loan is lower, although the initial installments are higher.
Calculation example
Example 1 – Installments equal to
Loan PLN 400,000 for 25 years with an interest rate of 7% (including a margin of 2%).
- Monthly installment: approx. PLN 2,830
- Total cost of the loan: approx. PLN 850,000
- Total interest: approx. PLN 450,000
Example 2 – Decreasing installments
Same amount and period. The first installment is approximately PLN 3,333, the last one is PLN 1,120.
- Total cost: approx. PLN 780,000
- Savings compared to equal installments: approx. PLN 70,000
Impact of overpayments
Overpayments are an effective way to shorten the repayment time and reduce interest costs. Example:
- A regular overpayment of PLN 500 per month for a loan of PLN 400,000 shortens the repayment period by 4 years.
- Total interest savings: approx. PLN 80,000.
The calculator allows you to set both recurring and one-time overpayments. You can also choose whether the overpayments should shorten the loan period or lower the installment.
Additional costs
In addition to interest and commission, other costs should be taken into account:
- Preparation fee– a one-time fee charged when the loan is disbursed.
- Bank commission– may be expressed as a percentage or amount, financed from own funds or from a loan.
- Insurance– often required for mortgage loans; may be added to the installment or paid in advance.
- Bridging fees– valid until the mortgage is entered in the land and mortgage register, usually for the first 3-6 months.
Comparison of loan offers
The calculator allows you to simulate various scenarios, e.g. changes in interest rates, commissions, loan period or overpayment amounts. Thanks to this, you can compare the real cost of offers from several banks and choose the most profitable one.
The most common mistakes of borrowers
- Not taking into account the total cost of the loan (APR).
- Assuming overly optimistic interest rate scenarios.
- Underestimation of insurance or commission costs.
- No financial reserve in case of an increase in installments.
FAQ
How to calculate the loan installment?
Just enter the loan amount, interest rate and repayment period. The calculator will calculate the amount of the monthly installment in an equal or decreasing system.
What is APR?
The Actual Annual Interest Rate takes into account all loan costs - interest, commissions and insurance - and allows you to compare banks' offers.
How do loan overpayments work?
The overpayment reduces the outstanding balance, which reduces interest. It can be used to shorten the loan period or reduce the installment.
Summary
The loan calculator is a practical tool for people planning a mortgage or cash loan. It allows you to check how much the loan really costs, how the amount of installments changes with various parameters and how much overpayments can accelerate debt repayment. This is irreplaceable support in making conscious financial decisions.
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