LoanWise

Monthly payment = P × [r(1+r)^n] / [(1+r)^n - 1], where P is the principal, r is the monthly interest rate (annual rate ÷ 12), and n is the number of payments. This standard amortization formula ensures your balance reaches exactly zero on the last payment.

The interest rate is the annual cost of borrowing the principal only. APR (Annual Percentage Rate) includes interest plus fees (origination fees, closing costs), making it a more complete picture of the true cost of a loan. Always compare APR when shopping for loans.

A common guideline is the 28/36 rule: keep total debt payments under 36% of gross monthly income, with no more than 28% going to housing. Use the Affordability calculator above to find your maximum loan amount based on your income and existing debts.

Yes — extra payments reduce principal faster, which means less interest accrues over time. Even one extra payment per year can cut years off a loan and save thousands in interest. Use the Payoff calculator to see exactly how much you could save.

Most lenders require a minimum score of 580–600 for approval. Scores above 700 typically qualify for the best rates (below 10% APR). Below 580, consider a secured loan or credit-builder loan to improve your score before applying.

Refinancing makes sense when the new interest rate is at least 1–2% lower than your current rate and you plan to keep the loan long enough to recoup closing costs. Use the Refinance calculator to compare total interest paid under both scenarios.