Amortization Calculator With Missed Payments

Amortization Formula with Missed Payments:

\[ A = P \times \frac{r(1+r)^n}{(1+r)^n - 1} \] \[ Balance_{adjusted} = Balance \times (1 + r)^{missed} \]

Principal Amount (P):

Interest Rate (r):

decimal

Loan Term (n):

months

Missed Payments:

payments

Original Monthly Payment:

Adjusted Balance:

New Monthly Payment:

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1. What is Amortization with Missed Payments?

This calculator shows how missed payments affect your loan balance and repayment schedule. When you miss payments, interest continues to accrue, increasing your outstanding balance and potentially changing your future payment amounts.

2. How Does the Calculator Work?

The calculator uses standard amortization formulas with adjustments for missed payments:

\[ A = P \times \frac{r(1+r)^n}{(1+r)^n - 1} \] \[ Balance_{adjusted} = Balance \times (1 + r)^{missed} \]

Where:

\( A \) — Monthly payment amount
\( P \) — Principal loan amount
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( n \) — Total number of payments (loan term in months)
\( missed \) — Number of payments missed

Explanation: The first formula calculates the original monthly payment. The second formula adjusts the balance for missed payments by compounding interest during the missed period.

3. Importance of Calculating Missed Payments

Details: Understanding the impact of missed payments helps borrowers see how delinquency affects their total loan cost and repayment timeline. It also helps lenders assess risk and determine appropriate remedies.

4. Using the Calculator

Tips: Enter the original loan amount, annual interest rate (as a decimal), loan term in months, and number of payments missed. All values must be valid (positive numbers).

5. Frequently Asked Questions (FAQ)

Q1: How do missed payments affect my loan?
A: Missed payments increase your outstanding balance due to accrued interest, which may lead to higher future payments or extended loan term.

Q2: Can I catch up after missing payments?
A: Some lenders offer repayment plans or loan modifications. This calculator helps you understand what's needed to get back on track.

Q3: Does this account for late fees?
A: No, this calculator only accounts for accrued interest. Late fees would further increase your balance.

Q4: How accurate is this calculation?
A: It provides a good estimate, but actual terms may vary based on your lender's specific policies.

Q5: What if I can't afford the new payment?
A: Contact your lender immediately to discuss options like loan modification, forbearance, or refinancing.