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Learn How You Can Use Amortization Calculators to Calculate Your Monthly Loan Repayments

An amortization calculator will help you to decide how much of the amount you are paying every month for you mortgage will go toward the amount of principle and how much will go toward the interest. An amortization calculator can be used for either your home or your car or any other loan that charges interest.

Using the calculator is very easy. All you have to do is put in the required figures. You will be asked to provide the amount of the loan, the rate of interest you are paying, the term of loan and the date that you started or will start to repay the loan. Once you click on “calculate”, the information will be produced.

Figures You Receive

Once you hit calculate, the calculator will provide you with the critical information you want. Your monthly payment is calculated as well as interest paid, your total number of payments as well as the date of pay-off.

Buying A House

For example if you input the amount of $200,000 with 5.25  percent interest rate and the term of the loan being at thirty years, the calculator will bring up a loan payment amount of $1104. It will show you the total interest paid which in this example is $197,587. For a thirty year loan, your total payments will equal $397,587. In addition, you will be able to see the month and year of your payment date.

Useful for Major Purchases

Let’s take a look at another example to see how using an amortization calculator can help you to make a wise decision before deciding to make any major purchase. When you are car shopping you can use the calculator to determine the actual amount you will be paying when all is said and done. The car sales person will make it seem like he is giving you the deal of a lifetime but keep your head about you and use the calculator to determine the real cost of the vehicle.

Car Purchase

When you are car shopping, it can be very stressful especially when trying to stay within budget. Sales people, for the most part are not interested in helping you stay in your budget. They want to make the sale and the more you pay the better commission for them.

Keeps You In Budget

Using the calculator will help you to keep a cool head. When you see the figures in front of you, you will be able to decide at that time if you are comfortable with the figures. For instance, if your car budget is $24,000 and you qualify for a nice 2.9 interest rate on a five year loan, your payment will show up as $430 with total interest paid of $1811. Total cost of car is $25,811. You may be fine with that.

Payments and Interest

However, the sales person brings to your attention a car that you fall in love with. The cost is as they say “only slightly over your budget” at $28,000. Before you sign the papers, you can pull up your calculator and pop in the relevant figures. You determine that the payment for this “dream” car will be $502 with total interest paid of $2113. These figures can bring you back to reality and before you even take the vehicle for a test drive, you decline the offer.


An amortization calculator can keep you in budget, help you to see what you need to do in order to pay a loan off early and provide you with information to keep you realistically within your means to repay a loan.