1. What is the Amortization Calculator?

The Amortization Calculator for Existing Loan calculates the remaining balance after a specified number of months, given the current principal, interest rate, and monthly payment. It helps borrowers understand how much they'll still owe after making payments for a certain period.

2. How Does the Calculator Work?

The calculator uses the amortization formula:

Where:

• \( \text{Current PV} \) — Current principal balance (USD)
• \( r \) — Monthly interest rate (decimal)
• \( m \) — Number of future months
• \( \text{PMT} \) — Monthly payment amount (USD)

Explanation: The formula accounts for both the growth of the principal due to interest and the reduction from monthly payments.

3. Importance of Amortization Calculation

Details: Understanding your remaining balance helps with financial planning, refinancing decisions, and assessing the impact of additional payments on your loan payoff timeline.

4. Using the Calculator

Tips: Enter your current loan balance, monthly interest rate (annual rate divided by 12), number of months you want to project, and your regular monthly payment. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do I convert annual rate to monthly?
A: Divide your annual percentage rate (APR) by 12. For example, 6% APR becomes 0.06/12 = 0.005 monthly rate.

Q2: What if I make extra payments?
A: This calculator assumes regular payments only. For extra payments, you would need a more detailed amortization schedule.

Q3: Why might my actual remaining balance differ?
A: Actual balances may vary due to payment timing, rounding, or if your lender uses slightly different calculation methods.

Q4: Can I use this for any type of loan?
A: This works for standard amortizing loans (mortgages, auto loans, etc.), but not for interest-only or balloon payment loans.

Q5: What does a negative remaining balance mean?
A: A negative result means your payments would pay off the loan before the specified number of months.