# Loan Balance

vCalc Reviewed
Equation / Last modified by Tim on 2015/07/13 11:27
Loan Balance =
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vCalc.Loan Balance
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6a675bd2-f85f-11e2-bb9f-bc764e049c3d

This Loan Balance equation computes the remaining debt (principal balance) on a fixed interest loan after a period of monthly payments have been made.

# Inputs

The input parameters are:

1. L - The Principal loan amount, the amount originally financed
2. n - The number of months in the duration of the original loan; for a 30 year loan that is n = 30 *12 = 360
3. p - The number of months into the loan,  the number of monthly payments that have been made to date
4. r -The annual interest rate entered as a percent; i.e., enter 4.5 for an interest rate of 4.5 %.

# Usage

This equation might be simply used just to give a homeowner an idea how much there still is to be paid on their mortgage loan.

The equation would be useful in analysis of refinancing options, first computing with this equation how much will have to be refinanced at the present point into the loan.  The output from this equation would then serve as the financed principal for calculating refinancing options.