# Installment Loan Calculator

Installment Loan Calculator

Loan Amount:
Loan Duration (in months):
Interest Rate:
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### Installment Loan Definition

Using a free Installment Loan Calculator can help determine the amount of loan you can afford from the bank. The Installment Loan Calculator will let you test out different loan amounts, loan durations and interest rates to see what your monthly payments will be and how much interest you will pay over the course of the loan.

It’s important to do this research on your own before you talk to a bank because:

• Only you know what you can afford to pay out on a monthly basis, which affects how the amount of the loan
• Different banks will offer different interest rates; an Installment Loan Calculator will help you find a good range of rates that will work for your budget
• You can test how different loan durations will affect your monthly payments and overall interest

### How to Use the Installment Loan Calculator

When you look at the Installment Calculator, there will be spaces for you to provide three different pieces of information:

• Loan Amount -how much the bank will give you for the purchase
• Loan Duration (in months) – how long you plan to make monthly payments to re-pay the loan
• Interest Rate – the rate at which you are paying the bank for loaning you money

Say for example you are interested in purchasing a new car and you want to use the Installment Loan Calculator for different Loan Amounts. Here’s what you do:

1. Enter the first loan amount you want to check (for our test, let’s say \$28,000)
2. Enter the loan duration amount (let’s try 60)
3. Enter the Interest Rate (since this is for instructional purposes, type in 3.5)
4. Click the Calculate Button

The Installment Loan Calculator tells us that for a loan amount of \$28,000 for 60 months with an interest rate of 3.5%, the monthly payment will be \$509.37.

If you want to go back and see how the monthly payment is be affected if the loan duration becomes 72 months, click the Back Button to make the change.

### How to Calculate Installment Loan

Let's be honest - sometimes the best installment loan calculator is the one that is easy to use and doesn't require us to even know what the installment loan formula is in the first place! But if you want to know the exact formula for calculating installment loan then please check out the "Formula" box above.