Loan Calculator

Essentially, a loan is an agreement where a lender provides a sum of money—called the principal—to a borrower, who then must repay it later. Generally, loans fall into three main types:

1. Amortized Loan: Fixed payments paid periodically until loan maturity
2. Deferred Payment Loan: Single lump sum paid at loan maturity
3. Bond: Predetermined lump sum paid at loan maturity (the face or par value of a bond)

Amortized Loan: Paying Back a Fixed Amount Periodically

Use this calculator for basic calculations of common loan types such as mortgages, auto loans, student loans, or personal loans, or click the links for more detail on each.

Deferred Payment Loan: Paying Back a Lump Sum Due at Maturity

Bond: Paying Back a Predetermined Amount Due at Loan Maturity

Use this calculator to compute the initial value of a bond/loan based on a predetermined face value to be paid back at bond/loan maturity.

Amortized Loan: Fixed Amount Paid Periodically

Most consumer borrowing belongs to this group, where borrowers make steady, evenly‑spaced payments that cover both principal and interest until the balance is cleared. Typical examples are mortgages, auto loans, student loans and personal loans. In everyday talk, "loan" usually means this kind rather than the other two varieties described later. Below you’ll find links to calculators tailored to these amortized loans, offering deeper details or precise computations for each scenario. Depending on your goal, one of the specialized calculators may serve you better than the generic Loan Calculator:

Mortgage Calculator	Auto Loan Calculator
Student Loan Calculator	FHA Loan Calculator
VA Mortgage Calculator	Investment Calculator
Business Loan Calculator	Personal Loan Calculator

Deferred Payment Loan: Single Lump Sum Due at Loan Maturity

A number of commercial or short‑term loans belong to this segment. Unlike amortized loans, they are repaid with one large payment when they mature. Certain products, such as balloon loans, may allow smaller periodic payments, but the calculation shown here assumes a single payoff of principal and interest at the end.

Bond: Predetermined Lump Sum Paid at Loan Maturity

These instruments are rarely issued as traditional loans, except when they take the form of bonds. Bonds differ from standard loans because the borrower agrees to make a single, predetermined payment when the bond reaches maturity. The bond’s face—or par—value is the amount the issuer must pay back at that time, assuming no default.

Bond markets mainly feature two varieties: coupon bonds and zero‑coupon bonds. Coupon bonds provide periodic interest payments calculated as a percentage of the face value, typically paid annually or semi‑annually. Zero‑coupon bonds, on the other hand, do not distribute interest; instead, they are sold at a deep discount and the full face value is repaid at maturity. Note that the calculator above is designed for zero‑coupon bonds.

Once a bond is issued, its market price can swing with changes in interest rates, economic conditions and other factors. Although these fluctuations don’t affect the amount owed at maturity, the bond’s price may rise or fall during its life.

Loan Basics for Borrowers

Interest Rate

Compounding Frequency

Loan Term

The loan term denotes how long the borrower has to fulfill the repayment schedule, assuming the minimum required payments are made each month. A longer term usually spreads payments out, lowering each installment but increasing total interest paid, thereby raising the overall cost of the loan.

Consumer Loans

There are two basic kinds of consumer loans: secured or unsecured.

Secured Loans

A secured loan is one where the borrower pledges an asset as collateral before receiving funds. This gives the lender a lien—a legal claim to the property—until the debt is satisfied. Consequently, if the borrower defaults, the lender can seize the pledged asset. Common examples include mortgages and auto loans, where the lender holds the property deed or vehicle title until the loan is fully repaid. Failure to meet mortgage obligations can lead to foreclosure, while missing car‑loan payments may result in repossession.

Financial institutions typically shy away from extending large sums without any form of security. By requiring collateral, secured loans lower the lender's exposure to default, as the borrower stands to lose the pledged asset. Should the collateral's market value fall short of the remaining balance, the borrower remains responsible for the shortfall.

Secured loans generally have a higher chance of approval compared to unsecured loans and can be a better option for those who would not qualify for an unsecured loan,

Unsecured Loans

An unsecured loan is a credit arrangement that does not involve any pledged assets. Because there is no collateral to fall back on, lenders must assess the borrower's creditworthiness through other means, commonly the five C's of credit—a framework that evaluates character, capacity, capital, conditions, and collateral (even though collateral is absent in this case).

• Character—may include credit history and reports to showcase the track record of a borrower's ability to fulfill debt obligations in the past, their work experience and income level, and any outstanding legal considerations
• Capacity—measures a borrower's ability to repay a loan using a ratio to compare their debt to income
• Capital—refers to any other assets borrowers may have, aside from income, that can be used to fulfill a debt obligation, such as a down payment, savings, or investments
• Collateral — a guarantee offered for a secured loan, representing an asset that the lender can claim if the borrower fails to meet repayment obligations.
• Conditions—the current state of the lending climate, trends in the industry, and what the loan will be used for

Because they lack collateral, unsecured loans usually carry higher interest rates, smaller credit limits, and shorter repayment horizons compared to secured financing. Lenders may also ask for a guarantor—a third party who agrees to assume the debt if the borrower defaults—particularly when the applicant is deemed high‑risk.

When borrowers fall behind on unsecured obligations, lenders often turn to collection agencies, firms specializing in recovering overdue payments or delinquent accounts.

Typical forms of unsecured credit include credit‑card balances, personal loans, and student loans. For detailed estimates, check out our Credit Card Calculator, Personal Loan Calculator, or Student Loan Calculator.

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