We suggest you view the e-learning module 306- Introduction to the Loan Calculator
This calculator allows you to run Amortization Schedules for a loan, calculate loan payments or calculate a loan balance at any point in time before or after the loan date that is entered.
Amount Borrowed: Is the principal balance outstanding at the beginning of the loan. Loan Date: Is when funds are advanced or the date when the balance applied. If the frequency of payments was monthly, the first payment occurs one month after the loan date.
Current Balance at: Is the value shown as per the date indicated.
Renewal Date: Is the date when the loan can/will be renewed.
% Interest/Year: Interest rate per year (i.e., 6.5%).
US loan: Use a 30-day month for interest calculations for weekly and biweekly payments, as opposed to the Canadian 365/12.
Compounding: Whether the interest is compounded monthly, quarterly, semi-annually or annually. Press the space bar to open the popup with these alternatives or click on the down arrow button at the end of the field.
Amortization: In months or years (the period until the loan is fully paid off). If you have a payment amount in the payment field then you can click on the Amortization button to let the software calculate how long it will be before the loan is paid off. The calculations work from the payment amount and the schedule is printed for the term of the loan (loan date to renewal date).
Payment Type: Would normally be blended, but you can also select fixed principal payments plus interest or interest only, but the system does not calculate payment amounts for other than blended payments.
Freq. Payments: Is the frequency of payments. Select from weekly, every fourteen days, twice a month, monthly, every two months (bimonthly), quarterly, semi-annually or annually.
Payment: Is the total payment for blended loans, the principal portion for a fixed principal plus interest, or left blank for interest only. By pressing on the Payment button the software will calculate the amount of payment required to pay the loan off using the amortization period and the interest with the payment frequency and the payment type.
Increase by /Year: Allows you to specify a fixed dollar amount or percentage increase in the payment amount to become effective on the anniversary date of the loan. As an example, you could say that the payment will be increased by 5% each year, or that the payment will be increased by $100.
Anniversary Lump: Is any additional principal payment that occurs each year on the month and day of the original loan.
Number Of Irregular Payments: Enter the number of irregular payments.
In the What it will cost?
This section you can see the Total Interest Paid, Total Principal Paid, and the Total Payments on this Loan.
The following sections are sub screens each button will allow calculation of:
Borrow for Non-Registered Investment
This calculation is used when evaluating deductible interest on an investment loan.
Marginal Tax Rate: is used to estimate the incremental taxes.
Fees on Purchase: is entered if there is a front-end fee for the purchase of the investment.
% Of Investment Income Taxable: an estimate of what percentage of the return on the investment will be taxable. An interest bearing investment may be taxed at 100%; other investments might be subject to a preferred tax treatment.
The rate of return that would need to be achieved to break even on the investment is displayed. If you can do better than this rate of return it is worth borrowing. A lower return and you would be better by not borrowing.
Interest Rate Differential
Use this aspect of the calculator to compare a new loan (main window) with an existing loan to determine the difference in interest paid. This is used when you are looking at re-mortgaging, if the interest rate differential is greater than the penalties it may be advantageous to re-mortgage.
Current Rate: the interest rate on the old loan
Same Payment or Amortization: use this radio button to indicate if the new loan will keep the same payment each period (reducing the amortization) or the same amortization (reducing the payment).
How Much Can I Borrow? By entering Values in the How Much Can I Borrow section you can help determine the amount of the additional loan you would be eligible for using a Total Debt Service (TDS) calculation.
Family Income per Year: the total family income.
Total Other Payments per Month: the other monthly loan payments made by the family, not including the loan being worked on.
Total Debt Service Limit: the percentage of income that is allowed for debt service.
By selecting the Schedule button, it will bring up the Loan Amortization schedule report in a PDF format.