Loan payoff calculator and how to pay off mortgage
Loan payoff calculator and how to pay off mortgage. If you’re shopping for a loan, it helps to know the numbers before applying anywhere. This Loan Payoff Calculator will help you to know the monthly payment, the term, and even the total interest you’ll pay on the loan before you even make an application.
Loan payoff calculator on paying off mortgage
Considering taking out a loan?This simple loan payoff calculator can tell you either:
- How much you’ll need to pay per month to pay off a given amount in a fixed amount of time.
- How long it will take to pay off a given amount with a given monthly payment.
Use the calculator to help you find a monthly payment that will be a comfortable fit in your budget. But you can also experiment with different loan terms after all, while a low payment may be attractive, paying a loan off a year or two early can prove to be an even better option.
Loan Payoff Calculator
Calculate how long it will take you to pay off a given loan based on monthly payment, or how much it will cost monthly to pay off a loan at a given term.
Calculate by monthly payment
For many consumers, the monthly payment on a new loan is the single most important factor. You can use the Calculate by Monthly Payment option to find what you feel will be the right payment for you.
Just as was the case when I did Calculate by Loan Term, I’ll start by entering a loan amount of $10,000 and a loan APR of 7%.
Next, click the Calculate by Monthly Payment option. Then hit the Calculate button.
You’ll be asked to enter the Expected monthly payment. For the sake of example, let’s enter $155, then hit the Calculate button.
Calculate by loan term
This option will help you to determine how long it will take to pay off your loan, based on the loan amount, the interest rate, and the proposed term of the loan. If you’re simply playing around with different numbers, you can adjust the length of the loan term to determine a payment level that’s acceptable to you.
But this option will also give you another important piece of information you need to know, and that’s the amount of interest you’ll pay over the length of the loan. The longer the term, the higher the total interest paid will be. In that way, you’ll be able to make an intelligent decision about both the monthly payment and the total interest cost of the loan.
When you select this option, you’ll be asked two additional questions:
Loan term – ranging from 12 to 84 months.
Extra monthly payment (optional) – enter any additional principal you plan to add to your monthly payment, but leave it blank if you only intend to make occasional additional payments.
What you should know about loan payoffs
As I demonstrated with the loan examples above, loan payoffs are something of a trade-off between the monthly payment and the total cost of the loan. The lower the monthly payment you choose, the longer the loan term will be, and the more interest you’ll pay over the life of the loan. That will increase the total cost of the loan.
You’ll need to decide what’s more important – a low monthly payment, or getting the loan paid off as soon as possible and saving money on the total cost.
There’s one other factor you should be aware of, especially when it comes to personal loans. Some personal loan lenders charge origination fees equal to between 1% and 6% of the amount you borrow. That means you may pay between $100 and $600 on a $10,000 loan.
How the Loan Payoff Calculator works
To use the loan calculator, you’ll start by entering two critical pieces of information – the Loan Amount and the Loan APR (interest rate) you’re paying.
From there, you’ll have the option to Calculate by Loan Term or Calculate by Monthly Payment. Click the bubble next to the one you want to calculate first.
How can I pay my mortgage off 5 years early?
The Five ways that yo can pay off your mortgage early
- Make one extra mortgage payment per year (consider bi-weekly payments).
- Recast your mortgage instead of refinancing.
- Refinance to a shorter term.
- Make extra principal payments.
- Reduce your balance with a lump-sum payment.
Why you shouldn’t pay off your mortgage early?
If you’re trying to pay off your mortgage early, the worst thing you can do is give the bank extra. It puts you at risk. It doesn’t lower your payment, and when you need access to that cash, it’s now the bank that controls the money, not you.
What happens if I pay an extra $200 a month on my mortgage?
The additional amount will reduce the principal on your mortgage, as well as the total amount of interest you will pay, and the number of payments. The extra payments will allow you to pay off your remaining loan balance 3 years earlier.
How do you calculate loan payoff amount?
Each month the lender multiplies the principal balance owed by 1/12th of the annual percentage rate. This amount is then deducted from the payment amount. The amount remaining after the interest charge is deducted is the amount of your payment that will be used to reduce the principal amount owed.
How do I calculate my refinance payoff amount?
Calculating The Payoff
In summary, the payoff is calculated by adding the unpaid mortgage principal balance, adding the per-diem interest owed, and adding whatever payoff fees are charged by the mortgage servicer (typically about $100 to $150).
How do you calculate loan payoff amount?
Each month the lender multiplies the principal balance owed by 1/12th of the annual percentage rate. This amount is then deducted from the payment amount. The amount remaining after the interest charge is deducted is the amount of your payment that will be used to reduce the principal amount owed.
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