Determining which loan provides you with the best value is more than simply comparing monthly payments. Use this calculator to sort through the monthly payments, fees and other costs associated with getting a new loan. By comparing these important variables side by side, this calculator can help you pick the loan that works best for you.
Definitions
Loan amount
The total amount for this loan.
Interest rate
The interest rate on this loan.
Loan term
The number of years over which
you will repay this loan. The most common terms are 15 years and
30 years. If this loan has a balloon payment, this will be shorter
than the number of years to amortize the loan. For example, a loan
with a 5 year term amortized over 30 years will have the same monthly
payment as a 30 year loan with the same interest rate. The difference
is the 30 year loan will have equal payments for 30 years. The 5
year loan will have equal payments for 5 years and then a very large,
or balloon, payment for the remaining balance.
Amortization
The number of years used in calculating
the monthly payment. Loans that are amortized over a longer period
than their loan term have a balloon payment. See "Loan term" for
more information.
Origination fee
The amount charged as a loan origination
fee which is included in the APR calculation. For many loans a 1%
origination fee is common. For example, a 1% fee on a $120,000 loan
would cost $1,200.
Commitment fee
An upfront fee included in the
APR calculation.
Other fees
Any other fees that should be included
in the APR calculation. These fees can vary by lender, but at a
minimum usually includes prepaid interest.
Other costs
Any other costs that should be
included in the APR calculation.
Monthly loan payment
Monthly principal and interest
payment (PI).
Annual percentage rate (APR)
A standard calculation used by
lenders. It is designed to help borrowers compare different loan
options. For example, a loan with a lower stated interest rate may
be a bad value if its fees are too high. Likewise, a loan with a
higher stated rate with very low fees could be an exceptional value.
APR calculations incorporate these fees into a single rate. You
can then compare loans with different fees, rates or different terms.
Balloon payment
This is the total final payment
for all loans that are amortized over a period which is longer than
the loan term. The balloon payment is total interest and principal
balance due at the end of the loan term. (If the loan term is the
same as the amortization this amount is always zero.)
Information and interactive calculators are made available to you as self-help tools for your independent use. We can not and do not guarantee their accuracy or their applicability to your circumstances. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
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