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# Annual Loan Repayment Calculator

Paying off a debt could take years and sometimes decades and knowing the actual amount that is payable in a year could be really useful for better financial management. You might want to make a financial budget for your household or for your company. Adding all the payables in a year will help you know the amount of fixed expenditure.

 Loan Amount Interest Rate % Number of Years
 Annual Payment

## Annual Loan Repayment Calculator: helps you with better debt management

Annual loan repayment calculations will show you the amount of money that you owe your lender for a year. These calculations will show you the total value (Principal amount + Interest amount) that you will be paying annually. Let's have a look at how loan repayment work.

## Annual loan repayment calculations for all kinds of loans

Repayment can be defined as the process of paying back the money that you have borrowed from the lender on a monthly basis during a pre-selected period. These monthly payments include both interest and principal parts. To begin, the loan repayment period for any kind of loan, there is generally a contract between the lender and the borrower. The loan can be repaid in full given you meet the requirements and pay the pre closed fee defined in the contract.

Loans are availed by both individuals and corporations, the common type of loans include: Personal loan, business loans, mortgages, student loans, auto loans and loans on credit cards etc. All kinds of loans are paid off using the repayment process. An annual loan repayment shows you the outstanding balance after you have paid the interest and the principal amount due for the year.

Loan repayments are generally done on a monthly basis via Equated Monthly Installments (EMIs), however, there are two main methods that are used to calculate the parts of repayment. We will discuss these two methods in the following paragraph.

## The two types of loan repayment systems

Straight line or even principal payments: In this kind of loan repayments you calculate the repayment by taking the same amount of principal balance, however, the interest part keeps changing. The amount of Equated Monthly Installments (EMIs) keeps changing as well because the interest is charged on a different principal amount every month.

You generally pay bigger EMIs in the beginning of the loan, but the amount of monthly repayments keeps decreasing because every month, interest is applied on a smaller principal outstanding.

You can calculate the straight line repayments by dividing the total principal amount by the number of payments and interest is computed on the balance amount of the principal after making the monthly payments.

Even total payments of mortgage style repayment: As the name suggests, this kind of repayment is generally used for mortgage loans, but it is not limited to mortgages. You pay a fixed amount every month against the repayment for the entire term of the loan.

The interest and principal amount both keep changing, however, in this style of repayment borrowers pay a major part of the interest in the beginning of the loan term. The first EMI will have the highest amount of interest and the lowest amount of principal, and the opposite of this is true for the last EMI.

Calculating the loan repayment manually is a difficult task but can be done easily with the help of an online calculator. Let's find out how the Annual loan repayment calculator designed by iCalculator works in this regard.

## Using the Annual Loan Repayment Calculator for your loans

The annual loan repayment calculator has been created for your convenience. It is online and every easy to use. You may calculate the annual amount of your repayment just by entering the following details into the calculator:

• Loan Amount: The principal amount of the loan that you are borrowing from a bank or a financial institution.
• Term: Enter the preselected term in case of loan.
• Interest Rate: Input the rate of interest that is being offered by the bank.

On the basis of your inputs the calculator will provide you with a detailed chart that will income the following details:

• Monthly Pay: This will show you the amount of Equated Monthly Installment.
• Principal Paid: This column will show you the amount of principal that you will pay for each year until the loan tenure reaches its end and the loan is matured.
• Interest Paid: Similar to the principal paid, this column will contain the amount of interest that will be paid each year.
• Loan Balance: This column will show you the remaining amount of the principal amount that will be used in the interest calculation for the following year.