Loan Calculator

Calculate the monthly payment, total cost and interest of your personal, auto or mortgage loan.

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How does the loan calculator work?

Our calculator uses the French amortization formula, the system most widely used by banks and lenders across Latin America. Enter the loan amount, the annual interest rate and the term in months to get your exact monthly payment.

Besides the payment, the calculator shows the total you will pay over the life of the loan and how much of that total is interest.

Loan formula (French system)

Payment = P × [r(1+r)^n] / [(1+r)^n - 1]

Where:

  • P = Loan amount (principal)
  • r = Monthly interest rate (annual rate / 12)
  • n = Total number of payments (months)

Types of loans in Latin America

The main types of loans available in the region are:

  • Personal loan: For any purpose, generally at higher rates (15-40% per year depending on the country).
  • Auto loan: To buy a vehicle, with the car as collateral (rates of 10-25% per year).
  • Mortgage loan: To buy a home, with long terms and lower rates (8-18% per year).
  • Microloan: For small entrepreneurs, low amounts with variable rates.

Tips before taking out a loan

  • Compare offers: Do not settle for the first option. Compare at least 3 financial institutions.
  • Read the fine print: Check fees, mandatory insurance and prepayment penalties.
  • Calculate the total cost: Do not just look at the monthly payment. The total cost includes every payment over the life of the loan.
  • Check your repayment capacity: The payment should not exceed 30% of your net income.
  • Have an early-repayment plan: If you can, make extra payments to reduce the total cost.

Average interest rates in Latin America

Rates vary significantly by country and loan type:

  • Paraguay: 12-24% per year for personal loans
  • Argentina: 50-120% per year (driven by high inflation)
  • Mexico: 15-35% per year for personal loans
  • Colombia: 12-28% per year
  • Chile: 8-20% per year

Frequently asked questions about loans

The payment is calculated using the French amortization formula, which is the most common system in Latin America. This formula spreads the loan into equal payments that include both principal and interest.

The effective annual rate (EAR) includes the effect of interest compounding. It is different from the nominal rate, which does not account for compounding. Always compare loans using the EAR.

Yes, making early payments reduces the outstanding principal and therefore future interest. It is one of the best strategies to save money on a loan.

The general rule is not to commit more than 30-35% of your monthly income to debt payments. Banks in Latin America usually use this limit when approving loans.

With a fixed rate, your payment stays the same for the entire loan. With a variable rate, the payment can go up or down depending on market conditions. In high-inflation economies, a fixed rate tends to be more expensive but more predictable.