Interest Rate Calculator for loans can give you an insight into how much you’re going to pay in the duration of the loan. The interest rate calculator also shows you how much your monthly payments are going to be depending on the interest rate that applies to you.
What is the interest rate though? The interest rate is the amount you’re going to pay the lender in exchange for borrowing money. This is shown as a percentage of the principal which is the amount borrowed.
The interest rate applies to the duration of the loan. So, a $100 loan with a 7% interest rate means that you will pay $107 at year-end. Instead of thinking about borrowing the original amount of the loan, see the total cost. A $30,000 loan won’t cost you just $30,000. You will end up paying $32,400 when your monthly payments are finished.
That said, always consider the interest rate and look for the lowest possible. The bank you’re working with is most likely to offer you the lowest interest rate but this isn’t always the case. Look for other financial institutions and banks to see their interest rates and get it from a loan provider that offers the lowest.
How interest rate works?
For example, for a loan amount of $30,000 and $900 in monthly payments for 3 years, your interest rate will be 5.6% with $2,400 in interest paid in total. This is for figuring out your interest rate if you don’t know it. You can also calculate the interest rate based on the monthly payments you’re making.
The interest calculator below works simple. Enter your loan amount, term, and monthly payments. This will show you the interest rate. You can then use the interest rate shown in the results to compare with your loan. If you think that your loan is calculated wrongly by the loan provider, make sure to contact them as you may end up paying more for a simple math error.
There are also variable interest rates. If the loan provider offers you a variable interest rate, the rate may fluctuate over time. This is mostly based on inflation, another interest rate, and your payment responsibility. As long as you are up to your payments, the interest rate should remain the same.
As for the variable rates based on inflation and other interest rates, these are mostly very minor. For instance, a variable interest rate may jump from 5.05% to 5.95%.