Bank Staff Loan Calculator – This Microsoft Excel model shows how to create a loan amortization schedule, as well as deal with additional payments and interest rates
Whether you buy a car or home or pay a credit card, knowing how to calculate a loan payment is crucial considering your financial options.
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An amortization schedule often provides illustrated when paying a loan, as well as showing the balance of loans remaining after each charge. This schedule shows details of loans and lending fees. Amortization loans are repaid through periodic payments over the life of the loan. Payments typically evenly payments monthly, but not always. Each periodic payment includes both a major portion and a portion of interest.
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In this article, we show how to calculate a payment and create a loan amortization schedule in Excel.
For this reason of the model, we assume that the payments are made monthly, and we start by assuming that each charge is for the same amount. Equal monthly charges may be the case if the interest rate is fixed and there will be no additional main reductions.
As mentioned earlier, each fee consists of a portion of interest and a main portion. The loan loan portion on the loan term is higher at the beginning of the loan than in the end. This is because the principal is reduced on the life of the loan, causing lower interest costs as the loan reaches maturity.
Fortunately, we do not have to memorize this formula as Excel has useful functions that we can use instead.
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The PMT function uses the following syntax: PMT (Rate, Nper, PV, [FV], [type]). The first three arguments are needed and on what we focus.
With a monthly payment schedule, we will need to make sure we convert any annual number each month. Since interest rates are quoted in annual terms, we will need to convert this rate to a monthly rate not divided into 12. Similarly, if a loan is quoted over the years, we will need We multiply the number of years by 12 months. Good charge.
The PMT function automatically releases the result as a negative number unless we do the amount of the negative loan or enter the entire function with a “less” sign in front of it.
For example, we assume that the loan amount is $ 100, 000, with an annual interest rate of 7 percent and a one-year term (12 months). We insert that into the PMT function as = PMT (.07 / 12, 12, -100000), resulting in $ 8, 652.67.
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However, as part of a loan amortization schedule, we need to separate the monthly payments from the interest part and the main part.
Part of the interest in the loan payment is calculated using the starting balance of the loan. In other words, the formula is:
The amount of the loan starts to change monthly as a portion of the main balance has been repaid as part of the monthly payment.
Alternatively, we can use the IPMT Excel function, which has the following syntax: = IPMT (rate, per, nper, PV, [FV], [type]). Again, we focus on the arguments required:
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We continue our previous example, assume that the amount of the loan is $ 100,000, with a 7 percent annual interest rate. In addition, we assume that we want the amount of interest in the first month and the loan matures in 12 months. We enter that of the IPMT function as = IPMT (.07 / 12, 1, 12, -100000), resulting in $ 583.33.
If we were looking for portions of interest in the second month, we would enter = IPMT (.07 / 12, 2, 12, -100000), resulting in $ 536.26.
The payment portion of payment is lower in the second month as a portion of the loan amount was paid in the first month.
Following the calculation of the full monthly payment and the amount of interest, the difference between the two numbers is the main amount of payment.
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With our first example, the main payment of the first month is the difference in the total payment amount of $ 8, 652.67 with the interest payment of $ 583.33, or $ 8, 069.34.
Alternatively, we can also use PPMT function to calculate this amount. PPMT syntax is = PPMT (rate, per, nper, pv, [FV], [type]). We will focus on the four arguments required:
Again, we assume that the amount of the loan is $ 100, 000, with a 7 percent annual interest rate. In addition, we assume that we want the main amount in the first month and the loan matures in 12 months. We enter into that of the PPMT function as = PPMT (.07 / 12, 1, 12, -100000), resulting in $ 8, 069.34.
If we were looking for the main portion of the second month, we would enter = PPMT (.07 / 12, 12, -100000), causing $ 8, 116.41.
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Since we only calculate the second month of interest and the main part, we can increase both and see that the total monthly payment is $ 8, 652.67 ($ 536.26 + $ 8, 116.41) , which is exactly what we calculate most of the happiness.
Instead of hardcoding individual cell numbers in a worksheet, we can put all this data in a dynamic Excel spreadsheet and use these to create our amortization schedule.
The above screen shows a simple 12-month loan amortization schedule in our downloadable model. This amortization schedule is on the tagged worksheet
-Note that each monthly fee is the same, the interest part will decrease over time as more in the main part paid, and the loan is repaid at the end.
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Needless to say, many long-term loans are longer than one year, so we can further improve our worksheet by adding more periods and hiding those non-use periods.
To make this more dynamic, we create a dynamic heading using Excel’s Ampersand (“&” “symbol). The ampersand symbol is equivalent to the use of the Concat function. Then we can change the loan term and the heading is automatically updated, as shown below.
In addition, if we want to create a variable period of amortization loan schedule, we probably do not want to show all calculations for our external damping periods. For example, if we have set up our schedule for a maximum amortization period of 30 years, but we just have to calculate a two-year period, we can use Excel’s conditional format to hide the 28 years we do not need.
First, we choose the entire maximum set of our amortization calculators. In the excel model, the maximum range of amortization on
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From there, go home on the Excel line, select a conditional format, then a new rule. We then use a formula to determine which cell format. In this case, we base everything over the number of months we want to see in our schedule. For months we do not want to see that we can change the white font so that it is not visible (assuming the worksheet uses the default white background).
For the conditional format rule, we will test to see if the value of column B is greater or equal to the total number of months we want to see. We add 1 to the end of the formula (see the screenshot below) account for “zero,” no charge.
We also want to make sure that the anchor is well established: we must completely anchor the C8 cell as we still want to refer that cell (total number of months). However, we only want to anchor column B as this column has the number of the month used to calculate the main interest and payment.
Basically, the conditional condition of the new rule says if everything in column B is greater than or equal to the total number of months of C8 cells (plus 1 in a “zero” month account ), then we have to change the white color font is therefore, it is actually “hiding” the values and calculations of these cells.
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For additional insurance, we also modify all calculations to return an empty cell if the specific month number is greater than the number of C8 cells. For example, first-month interest payments in E16 cells were modified for = if (b16 <= $ C $ 8, IPMT ($ C $ 6, B16, $ C $ 8,-$ C $ 4), “,”) – This is a relatively simple statement if tested to see if a specific month number is less than the total number of months. If this argument is true, the IPMT function returns the appropriate value. Otherwise, the statement if you return an empty cell, which may arise in Excel using dual quotes (“”).
This Excel model also allows the user to enter extra payments that are used to pay the additional principal. As the principal is being paid even faster, then the loan is repaid before his stated maturity. However, this requires substantial modifications from the previous worksheets.
, Note that we added an additional $ 500 main paydown a month. If a user wants to vary his extra payments, then these payments can be entered directly in the appropriate month. Otherwise, our model assumes the $ 500 overpayment made per month (or at least until the remaining main balance is less than $ 500).
As you can see below, we use a statement to remove the additional payment. The calculation ensures that the additional payment is made only if the additional payment is
