Understanding the Settings for a Simple Interest Loan Calculator with Amortization Schedule

When it comes to calculating interest on a loan, there are several settings and options to consider. In this article, we'll explore the key settings available in our simple interest loan calculator with amortization schedule, including the 'Loan Date', 'First Payment Due', and more.

Setting the Loan Date and First Payment Due

If you want to match other calculators, it's essential to set the 'Loan Date' and 'First Payment Due' so that the time between them equals one full period as set by the 'Payment Frequency'. For example, if April 10th is the 'Loan Date', and the 'Payment Frequency' is monthly, then setting the 'First Payment Due' to May 10th will result in an estimated interest calculation.

Important Considerations

It's crucial to understand that selecting dates will result in interest charges and payment calculations that may not match other calculators. This is because our calculator takes into account the actual loan terms, including the loan closing date, and calculates interest accordingly.

Loan Closing Date and First Payment Due

The 'Loan Closing Date' refers to the date when the loan proceeds are available to the borrower. For leases, this may be the same as the closing date. In other cases, payments will usually start sometime after the borrower has had access to the loan proceeds. This is also known as the origination date, loan date, or start date.

Understanding Annual Interest Rate and Payment Amount

The annual interest rate refers to the quoted interest rate for the loan, while the payment amount is the amount due on each payment due date. For a term of fifteen years, if the payment frequency is biweekly, you need to enter 390 for the number of payments.

Number of Payments (Term) and Loan Amount

The 'Number of Payments' setting, also known as the loan's term, impacts the length of the loan. The loan amount refers to the principal amount borrowed.

Using an Amortization Schedule

One of the most important features of our simple interest loan calculator with amortization schedule is the ability to confirm periodic interest charges using an amortization schedule. This allows borrowers to validate their calculations and ensure that they are accurate.

In conclusion, understanding the settings available for a simple interest loan calculator with amortization schedule is crucial for getting accurate results. By following the guidelines outlined in this article, you'll be able to set up your calculator correctly and get a clear picture of your loan's terms and conditions.

Simple interest loan calculator with amortization schedule