Solverly

Amortized Loan: Paying Back a Fixed Amount Periodically

Classic installment loan with a level payment each period.

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Payment Every Period
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Total of — payments: —
Total interest: —

Deferred Payment Loan: Paying a Lump Sum Due at Maturity

Nothing due during the term; interest accrues and the full amount is paid at the end.

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Amount Due at Loan Maturity
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Total interest: —

Bond: Paying Back a Predetermined Amount Due at Loan Maturity

Solve the present value given a fixed maturity amount and required yield.

yearsmonths
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Amount Received When the Loan Starts
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Total interest: —

How to choose the right loan structure

Not every loan behaves the same. Some are paid back a little each period, some accrue interest with nothing due until maturity, and some are priced as a discounted bond where you receive less up front and repay a fixed amount at the end. This page gives you three calculators that cover the most common cases so you can estimate payments, totals, and payoff timing with clarity.

1) Amortized loan — paying a fixed amount periodically

Most consumer loans (mortgages, auto loans, many personal loans) are amortized. Each payment contains both interest and principal. Early on, interest dominates; later, principal dominates as the balance falls. The amortization table shows exactly how much of each payment goes where and how the balance declines, which is helpful when planning extra principal payments or comparing term lengths.

2) Deferred payment loan — lump sum due at maturity

In some arrangements—promissory notes, certain education or bridge loans—you don’t pay anything until the end. Interest accrues during the term, and the full amount (principal plus accumulated interest) is due at maturity. These can be convenient in the short run but produce a bigger number at the end, so it is important to understand how compounding turns a small rate into a larger obligation over time.

3) Bond (discount) — receive less now, repay face value later

Bonds flip the perspective: the maturity amount is predetermined, and the calculator solves for the amount received today (present value) given a required yield. The difference between what you receive and what you repay is effectively the total interest. This framing is common in corporate notes and zero-coupon bonds.

Compounding choices

  • Monthly (APR): rate/12 applied each month; typical for consumer loans.
  • Quarterly (APR): rate/4 applied every quarter.
  • Annually (APY): an effective annual rate; per-period rate is the 12th/4th/1st root of the APY.

Reading the charts & tables

  • Pie charts show principal vs. interest share of the total obligation for the chosen structure.
  • The amortization tables list each period’s interest, principal (if any), and ending balance.
  • For amortized loans, payment is level each period. For deferred or bond style, there are no interim payments; the schedule shows compounding and the final lump sum.

Tips for comparing scenarios

  • Shorter terms raise the payment but reduce lifetime interest dramatically.
  • Even small extra principal on an amortized loan can move the payoff date forward and cut interest.
  • Deferred structures grow faster with higher compounding frequency; check the final number carefully.
  • With bonds, a higher required yield lowers the present value you’d receive today.

These are educational estimates, not lender quotes. Confirm terms with your lender or advisor before making financial decisions.

Loan Calculator FAQ

How do I calculate my monthly loan payment?

Use the standard amortizing loan formula: payment = r × P / (1 − (1 + r)−n) where P is principal, r is monthly rate (APR/12), and n is total months. Our calculator applies this and builds the schedule automatically.

What’s the difference between APR and interest rate?

The APR can include fees in addition to the nominal interest rate. For pure payment math, we use the periodic interest rate. APR is useful when comparing offers with fees.

What is an amortization schedule?

It’s a month-by-month table that splits each payment into interest and principal, shows the remaining balance, and totals your paid interest over time.

Why does a longer term increase total interest?

Longer terms usually mean more months of interest charges—even if the monthly payment is lower, the cumulative interest grows with time.

Do extra payments reduce my interest?

Yes. Extra money applied to principal lowers the balance sooner, so future interest is calculated on a smaller amount—shortening the term and cutting total interest.

What’s the effect of biweekly payments?

Paying half the monthly amount every two weeks yields 26 half-payments (≈13 full payments) per year. That’s like one extra monthly payment annually, typically shaving years off a 30-year loan.

Does my credit score change the payment?

Indirectly. Your score affects the rate you’re offered. A lower rate lowers the payment and total interest, all else equal.

Fixed vs. variable rate—what’s the difference?

Fixed rates keep the same payment and rate for the full term. Variable (adjustable) rates can change, so future payments may rise or fall based on the index and margin in your note.

Use cases & examples

Example 1 — Standard auto loan

Inputs: $25,000 at 6.5% APR for 60 months.
Payment: ≈ $489.15 per month.
Total of payments: ≈ $29,349.22  |  Total interest: ≈ $4,349.22.

Example 2 — $100/month extra on a 30-year mortgage

Inputs: $300,000 at 6.0% for 360 months, with an extra $100/month to principal.
Effect: payoff about 47 months earlier and save about $53,346 in interest (illustrative).

Example 3 — Biweekly on a 30-year mortgage

Inputs: $200,000 at 5.5% for 360 months; biweekly is roughly 13 full payments/year.
Effect: payoff about 5 years sooner and save roughly $41,000 in interest (illustrative).

How this calculator works (formula & assumptions)

We use the standard amortizing loan equation: payment = r × P / (1 − (1 + r)−n), with monthly rate r = APR/12, principal P, and term in months n.

  • Each period: interest = balance × r; principal = payment − interest.
  • Extras (monthly/yearly/one-time) reduce principal immediately.
  • Biweekly is approximated as 13 full payments/year (26 half-payments).
  • Assumes a fully amortizing fixed-rate loan with on-time payments; taxes/insurance/fees not included.