Personal Loan Payment Variable Rate Estimator

Initial payment is computed with the standard amortization formula: payment = P * r / (1 - (1+r)^-n) where P is principal, r is periodic rate, n is number of periods.

For index-based scenarios the calculation obtains an adjusted rate = index + margin, then applies contractual floor and caps. The estimator computes an approximate payment using that adjusted rate and the remaining number of payments. This is a simplification that provides a transparent, reproducible scenario rather than a full balance-by-balance projection.

When you choose a user-assumed future rate, the tool re-calculates payments using that constant rate for the entire remaining term.

This estimator provides quick, reproducible scenarios to compare initial vs. post-adjustment payments under configurable contract terms or user assumptions.

It is not a substitute for a full, period-by-period amortization with changing balances when index behavior or partial amortization is material; use the conservative assumption options or consult a lender/financial advisor for precise payoff schedules.

Example 1: $10,000 loan, 5-year term, 12 monthly payments/year, initial rate 6%. With index 4% and margin 2%, and a periodic cap of 2% and lifetime cap of 5%, the tool shows the initial payment and an approximate projected payment if the index stays at 4%.

Example 2: Same loan but you assume the future rate will be 8% permanently. Select 'Assume a constant future rate' and enter 8% to see the resulting periodic payment and total interest under that assumption.