Calculation methodology & assumptions
Our formulas are visible so you can check the arithmetic and understand what the tools do not include.
Fixed-rate amortizing payment
Let P = initial principal, r = annual note rate expressed as a decimal divided by 12, and n = number of monthly payments. For r greater than zero, the equal monthly payment is M = P × r ÷ [1 − (1 + r)−n]. At 0% interest, M = P ÷ n. The displayed amount rounds to cents, while internal calculations retain greater precision.
Interest and balance by payment
For each month, interest = current balance × monthly rate. Principal paid = scheduled payment − interest. New balance = prior balance − principal paid. The last payment may be smaller because remaining principal and accrued interest can be less than the regular scheduled amount. Real lenders may accrue daily interest, which changes their schedule.
Extra-payment payoff model
For each month, we add the entered extra amount to the scheduled payment and cap the amount at what is needed to retire the balance. We repeat until the balance reaches zero. We compare the sum of simulated interest with the standard schedule. This model assumes no fee, penalty, skipped payments or lender processing delay.
Principal supported by a payment budget
For a monthly payment M, the present value is P = M × [1 − (1 + r)−n] ÷ r, or M × n when the rate is zero. The result is the theoretical amount financed, not a lending approval or maximum affordable loan.
Loan comparison and fees
The comparison uses the same principal and independently computes payment and total interest for each rate/term pair. The fee tool adds an upfront fee to the scheduled interest and repayment totals. It does not represent that total as a legally defined APR. When a fee is financed rather than paid separately, increase principal appropriately before computing payments.
Debt-to-income calculation
DTI = monthly debt payments ÷ gross monthly income × 100%. The result is shown both for existing debt and for existing debt plus the currently calculated installment payment. Income and debt eligibility varies by lender and loan program.
Scope, accuracy and limits
We validate positive principal, payment and income, nonnegative rates and fees, and reasonable term lengths. The calculators assume monthly payments and a constant rate. They exclude variable rates, insurance, tax, escrow, late fees, compounding conventions other than monthly, legal APR calculations, and credit qualification. Verify all final amounts with a lender’s signed disclosures.