Calculation methodology
How we calculate and how results should be interpreted.
Transparent formulas
Loans and mortgages use the constant-payment formula with principal, periodic rate and number of payments. Microcredit uses a linear estimate for the selected term.
Assumptions
Results assume on-time payments and an unchanged rate. Fees, insurance, taxes and lender rounding can change the actual cost.
Verification
We test formulas with boundary cases and reproducible examples. Code changes require local checks and a review of this explanation.
Responsible use
This is an educational estimate, not an offer or personal advice. Compare the APR and binding documents before committing.
Inputs, units and edge cases
Entered rates are treated as annual nominal rates: divided by twelve for loans and mortgages and by 365 for microcredit. Constant payments use principal and payment count; at zero interest, principal is divided equally. Zero terms and unstable divisions are guarded. Loan grace months add interest-only payments without reducing principal. Alternative scenarios change one variable at a time and are not market forecasts.
How to check a simulation
Repeat the calculation with the same principal, rate and term and compare the first payment, total and balance after several instalments. If a lender uses different timing, rounding or fees, record the difference instead of forcing a match. For variable rates, test several rates and do not treat one result as a forecast.
Review and scope
Formulas and explanations are reviewed when calculation code changes or a material error is found. General content is checked periodically and shows its updated date.
Simulations do not automatically include every fee, tax, insurance cost or country-specific rule.