# Loan Balance Calculator

Created by Tomasz Jedynak, PhD
Reviewed by Bogna Szyk and Adena Benn
Based on research by
Cipra T. Financial and Insurance Formulas (2006)
Last updated: Nov 25, 2022

The loan balance calculator allows you to compute the remaining balance of your loan. If you want to quickly check how much you still have to repay – you have found the right tool. Our universal loan balance calculator may be used as a
personal loan calculator remaining balance calculator, a car loan balance calculator, or a mortgage balance calculator. All you need to do to calculate the remaining loan balance is to fill in the appropriate fields below.

## How to use our loan balance calculator

First of all, enter the original loan terms:

• The loan amount,

• The loan interest rate on a yearly basis. (Don’t you know how to calculate annual interest based on monthly or quarterly interest rates? Use our APY calculator),

• The loan term,

• the time that has passed by since you took a loan.

That’s all! The amount in the field loan remaining represents the value of your remaining loan.

## Example of use of the remaining balance calculator

Let's try the loan balance calculator as a simple example.

• On 1st May 2016, you borrowed 10,000 USD to buy a new car (it was a standard car loan).

• The payback period was set as five years.

• The interest rate on the loan was set as 5% (want to know what is your monthly payment? See our simple interest calculator).

• Now, it is May 2018. The question is how much you still owe to the bank.

The answer provided by our loan balance calculator is that your remaining loan balance is 6,297 USD.

## Formula for remaining loan balance

In order to calculate the remaining loan balance, you need to apply the following formula:

$\small \begin{split} \mathrm{loan}_{\mathrm{remaining}}& = \mathrm{loan}\times(1+r)^k \\ &- \mathrm{loan}\times \frac{(1+3)^n-1}{r} \end{split}$

Where:

• $\mathrm{loan}$ — The amount of loan;
• $r$ — The interest rate expressed on a monthly basis;
• $n$ — The loan term, which is the period for which the loan was granted; and
• $k$ — The time that has passed since you have taken a loan.

Do you want to be financially smart? Try our other personal finance calculators.

## Why do people take loans?

There are dozens of reasons why people take out loans. Among the most popular, there are needs such as:

• Car purchase - A car loan is one of the most popular types of loan. Usually, the cost of buying a car is a few times higher than your salary, so you need to find additional money to buy it.

• Home renovation or improvement - Most of us always have something to improve in the house. You can finance these costs by taking a bank loan.

• Vacations/dreams - Sometimes, the realization of our dream requires a lot of money (e.g., traveling, ideal wedding, unforgettable party), as you can see with our dream come true calculator.

• Medical expenses - Sometimes, people are forced to borrow money to cover their unexpected medical expenses.

• Bill consolidation - Nowadays, almost everyone has bills or debt of some sort. You can decide to consolidate your debts into just one loan. There are two reasons to do it: convenience (you have only one debt) and costs (in a consolidated loan, the interest rate is usually lower).

Moreover, one of the most popular types of loan is a mortgage, which allows you to finance the purchase of a home.

Tomasz Jedynak, PhD
Loan
$Interest rate % Loan term yrs mos Period yrs mos Loan remaining$
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