Result
Loan term
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Loan term under an annuity schedule = −ln(1 − monthly rate × loan amount ÷ payment) ÷ ln(1 + monthly rate) — the annuity formula solved for the number of periods instead of the payment. At a zero rate it simplifies to term = loan amount ÷ payment.
If the payment is less than or equal to the first month's interest (monthly rate × loan amount), the principal never shrinks — the loan won't be repaid in any amount of time, and the calculator shows that the payment doesn't cover the debt.
The result is a fractional number of months: in practice a payment schedule rounds to whole months, so the actual term in the contract may be one month longer than calculated here, with a smaller final payment.