The loan matrix is a tool used to calculate:
- the payments for a loan based on different interest rates and terms
- the payments for a loan based on different interest rates and loan amounts
- possible loan amounts based on different interest rates and payment terms for a given payment
The point of a matrix calculator is that it presents multiple results at one time. This can save you from doing a series of what-if calculations.
Some additional notes:
- Payment method: When the payments start. If the first payment is due on the day the loan originates, then select "start-of-period," otherwise select "end-of-period."
- Compound frequency: If the compounding frequency is not specified by the lender or you don't know it, then select the same value as "payment frequency."
- Step values: By how much to increase the x-axis and y-axis values from their initial values. For example, if you've set the "initial interest rate" to 5% and if you set the "rate step value" to 0.5% then the calculator will set the second value for the interest rate (x-axis) to 5.5%.
On the "Payment Amount - term varies" tab you can calculate a matrix of potential periodic payments for a given loan amount while varying the term and interest rate for the loan.
On the "Payment Amount - loan amount varies" tab you can calculate a matrix of potential periodic payments for a given term while varying the loan amount and interest rate.
The "Loan Amount" tab allows you to calculate a matrix of various loan amounts that can be borrowed for a given payment amount for different terms and interest rates.
The "step values" on either tab control by what amount the interest rate and term are going to increase.
Note: It is not necessary to clear one calculation before doing the next. You can change one value and recalculate.