What is an Amortization Loan Calculator?
An amortization loan calculator is a resource offered by lending institutions that enables a user (individual or entity who has taken out a loan or mortgage) to estimate the monthly payments attached to their particular loan.
The amortization loan calculator will display (subsequent to the satisfaction of a few variables) the remaining payments remaining on their particular loan or mortgage. Through the delivery of an amortization schedule, the amortization loan calculator enables the individual or entity who took out the loan to observe the expected payments until maturity. By viewing this information, the user of the amortization loan calculator is able to develop an appropriate budget to ensure that they meet the obligations of their particular loan. Additionally, through the delivery of such information, a user of an amortization loan calculator can observe the inner-workings of their loan and more specifically how their payments affect the principal and interest of the loan.
An amortization loan calculator is a free resource offered by the majority of lending institutions in the United States. The resource is free and easy to use and requires only the basic information attached to the particular loan or mortgage.
The loans associated with an amortization schedule typically possess a maturity date of 20-30 years. As a result of this long-term maturity schedule, the payments made towards both the principle and the interest would be difficult to evaluate without the inclusion of an amortization loan calculator.
In addition to revealing the expected monthly or periodic payments, the amortization loan calculator will reveal the percentage and total amount of the payments as they coordinate to paying off the interest and principal of the loan. Following the input of the required information, the amortization loan calculator will reveal the expected payments to maturity in a streamlined amortization schedule. The table, which effectively is known as the amortization table, will deliver each month’s payment and reveal how each payment is used to satisfy the interest and principal obligations of the loan.
What information is needed in an Amortization Loan Calculator?
In addition to this generic information, some amortization calculators will offer the user optional information, such as: the monthly additional principal prepayment amount, the one-time prepayment amount, and the annual principal prepayment amount of the loan.
When the above information is entered into the calculator (amortization calculators are typically offered on lending websites) the resource will construct a table that is unique to the user based on the loan information given.