Interest Rate Calculator

Use this interest rate calculator to solve for any missing loan term. All you need is any 3 of a loan's 4 terms (principal, interest rate, number of payments remaining, or payment amount), and this calculator will find the missing term.

Simply enter the 3 known loan terms in the appropriate entry fields and click on "Calculate" button. One empty field is required for recalculations. When you are done you can print an amortization schedule using the button at the bottom.

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**Interest Rates And Solving For A Missing Variable**

Need to figure out your interest rate or other missing loan term?

It can be difficult to find the right calculator for the job.

The good news is this Interest Rate Calculator is one of the most flexible around! It can solve for any missing loan variable including the number of payments, interest rate, loan amount, or monthly payment.

Simply enter three of the four variables, click *Calculate*, and you’ll get instant results for the missing variable. While you’re at it, create a printable amortization schedule that you can keep for handy reference.

Below we’ll explore what you need to know about interest rates as a borrower so you can make smarter decisions with your money.

## What Are Interest Rates?

An interest rate is the proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding. Interest is the money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.

Lenders give you money because they expect to make a return on their investment. The price of that money is interest. There are many types of loans that produce interest. Some loans have higher interest rates compared to others based on risk and collateralization.

Typically, credit cards and personal loans have the highest interest rates because they are unsecured by any collateral. Conversely, car and mortgage loans offer the lowest interest rates because they are secured by valuable collateral.

Other factors affecting the interest rate you will pay include your credit history, income level, expenses, and other factors affecting your perceived risk of default.

## Long-Term Versus Short-Term Loans

Interest rates are also influenced by the length of the loan term.

For example, A 30 year mortgage will require a higher interest rate than a comparable 15 year mortgage. This compensates the lender for what is known as duration risk. In other words, the longer the loan term the greater the risk that inflation and/or changes in interest rates will reduce the value of that loan.

Conversely, the shorter the loan term the lower your interest rate will be to reflect the reduced duration risk.

## Other Factors Affecting The Interest Rate

Sometimes there are special features in your loan that could affect the interest rate.

For example, if the lender allows you to make extra payments so that you can pay off your loan anytime without penalty then this will reduce the total expected value of the loan. The lender will then calculate a higher interest rate to offset this prepayment risk.

Also, the amount of money available for borrowing can impact interest rates. It is a simple supply/demand equation. If the demand for loans is greater than supply then the interest rates will be higher. If there are not many people applying for loans and there is plenty of money to lend then interest rates will decline to attract more borrowers.

The government also dictates the prevailing short-term interest rate based on economic conditions. However, long-term interest rates are determined by market forces and are not controlled by the government.

## Final Thoughts

Interest rates are one of the most important factors to consider when you apply for a loan. It one of four relevant terms that this interest rate calculator will figure for you.

If you’re taking a loan, it’s also wise to figure out all the conditions surrounding the loan before you sign on the dotted line.

- What’s the interest rate?
- Is it fixed or variable?
- How long will it take to pay off?
- What will be my total borrowing cost vs. paying cash?

This Interest Rate Calculator will help you determine any unknown variables thus giving you more information to make the best decision for your situation.

## Interest Rate Calculator Terms & Definitions

**Principal**– Denoting an original sum invested or lent.**Interest Rate –**The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.**Annual Interest Rate**– The annual rate that is charged for borrowing, usually expressed as a single percentage number that represents the actual yearly cost of funds over the term of a loan.**Term**– A fixed or limited period for which something lasts. In this case, a loan.**Monthly Payment**– The amount paid each month towards the principal and interest amount of a loan. The monthly payment may or may not include taxes and insurance. In this case, it’s best not to include taxes and insurance.**Loan**– A thing that is borrowed, especially a sum of money that is expected to be paid back with interest.**Principal –**Denoting an original sum invested or lent.**Lender**– An organization or person that lends money.**Borrower**– An organization or person that borrows money.**Amortization**– The spreading of payments over multiple periods.

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