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Formula Used
Periodic method: Interest = Balance × (APR ÷ PaymentsPerYear).
Day‑count method: Interest = Balance × APR × (DaysInPeriod ÷ Basis).
The calculator then allocates the available payment across buckets using the selected priority order (for example, fees before interest, then escrow, then principal).
How to Use This Calculator
- Enter your current balance, APR, and payment amount.
- Add optional fees, escrow, and any late or penalty amounts.
- Pick an interest method that matches your statement.
- Choose an allocation strategy to model lender rules.
- Click Calculate Allocation to see the breakdown.
- Use CSV or PDF buttons to export the results.
Example Data Table
| Scenario | Balance | APR | Payment | Fees | Escrow | Estimated Interest |
|---|---|---|---|---|---|---|
| Standard monthly | $120,000 | 6.25% | $900 | $15 | $120 | ≈ $625.00 |
| Biweekly + extra | $45,500 | 11.90% | $300 | $0 | $0 | ≈ $208.19 |
| Day‑count with fees | $8,750 | 18.00% | $250 | $25 | $0 | ≈ $129.45 (26 days) |
Allocation drivers across common buckets
Interest often dominates early periods on amortizing balances. On a $120,000 balance at 6.25% APR, monthly periodic interest is about $625. With a $900 payment, roughly 69% goes to interest before escrow or fees. After $15 fees and $120 escrow, about $140 remains for principal, so balance reduction is modest.
Extra payments and principal acceleration
Adding $100 extra principal to that case raises principal applied from about $140 to $240, a 71% increase. The next-period interest estimate drops by about $0.52 per month for each $100 balance reduction at 6.25% APR. Over 24 months, steady extra payments can reduce cumulative interest by several hundred dollars, depending on timing and rounding.
Periodic versus day-count interest
Some lenders accrue interest by day count rather than simple periodic rates. For an $8,750 balance at 18% APR over 26 days, Actual/365 yields about $112.19 interest, while 30/360 yields about $113.75. If a $250 payment also includes $25 fees, principal can fall below $115, and any unpaid interest may roll forward.
Frequency sensitivity and budgeting
Changing frequency changes the periodic rate and can shift the mix. A 11.90% APR balance of $45,500 produces about $208.19 interest biweekly (26 payments), compared with about $451.71 monthly (12 payments) for similar timing. If you keep the same annual outlay, more frequent payments may reduce average balance sooner, improving principal share.
Audit-ready exports for teams
CSV exports support reconciliation in spreadsheets, while the PDF report standardizes reviews. Track applied and unpaid amounts for fees, interest, escrow, and penalties to detect short payments. Scenario testing with different allocation strategies can reveal whether fees are consuming cash flow. Consistent snapshots improve forecasting, dispute resolution, and internal payment policy decisions. Use the CSV to build a running ledger: beginning balance, interest due, allocations, and ending balance. For portfolios, aggregate principal totals across loans to estimate paydown velocity. For customer support, the PDF helps explain why a payment did not reduce principal as expected in a clear timeline.
FAQs
1) What does the allocation strategy change?
It changes the priority order for applying money. Different lenders apply fees, interest, escrow, and principal in different sequences, which can alter how much principal is credited and which items remain unpaid.
2) Should escrow be included in my payment amount?
If your statement separates escrow, enter it in the escrow field so the breakdown reflects taxes and insurance. If escrow is already bundled into one payment, keep payment as the total and still enter the escrow portion.
3) Why do I see unpaid interest or fees?
When the payment is smaller than amounts due, the calculator shows what could not be covered. Some lenders carry unpaid amounts forward, and interest may capitalize depending on account rules and product terms.
4) When should I use day-count interest?
Use it when your lender accrues interest daily and your billing cycle length varies. Enter the days in the period and choose a basis (Actual/365 or 30/360) to match the convention used on your statement.
5) What if my payment exceeds the remaining balance?
The calculator caps principal so it never exceeds the balance. Any excess is treated as overpayment and reduced automatically in the “Extra Principal / Overpayment” line, leaving the new balance at zero.
6) Can I use this for credit cards and personal loans?
Yes for most installment loans and revolving balances when you know the balance and APR. Add any fees, penalties, and your payment amount, then select the interest method that matches how your provider calculates interest.