Loan & Credit Line Tax Savings Calculator

Loan & Credit Line Tax Savings

This calculator helps determine your tax savings on loans or credit lines with tax-deductible interest payments. For a loan payment, select fixed term loan. For a line payment, you can choose 2%, 1.5% or 1% of the outstanding balance or interest only.

Information and interactive calculators are made available to you only as self-help tools for your independent use and are not intended to provide investment or tax advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

Loan & Credit Line Tax Savings

This calculator helps determine your tax savings on loans or credit lines with tax-deductible interest payments. For a loan payment, select fixed term loan. For a line payment, you can choose 2%, 1.5% or 1% of the outstanding balance or interest only.

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For more information about these financial calculators please visit: Dinkytown.net Financial Calculators from KJE Computer Solutions, Inc.

By changing any value in the following form fields, calculated values are immediately provided for displayed output values. Click the view report button to see all of your results.

Your first year tax savings is $466.76.

*indicates required.

Loan & credit line inputs:

Calculate:

Calculate

Payment

Loan Amount

Payment option:*This entry is required.

Loan amount:*This entry is required.Enter an amount between $0 and $250,000,000

Monthly payment:

Interest rate:*This entry is required.Enter an amount between 0% and 50%

Term in months:*This entry is required.Enter an amount between 1 and 360

Federal tax rate:*This entry is required.Enter an amount between 0% and 50%

State tax rate:*This entry is required.Enter an amount between 0% and 50%

Calculation results:
First Year Savings: $466.76, Total tax savings: $1,118.27

Principal Balances for a $20,000.00 loan Column Graph: Please use the calculator's report to see detailed calculation results in tabular form.

Principal Balances for a $20,000.00 loan

Definitions

Loan amount

Total dollar amount of your loan or line of credit.

Interest rate (APR)

The annual percentage rate for this loan or line of credit.

Monthly payment

This is the monthly payment for this loan or line of credit. For lines of credit the payment can change month to month based on the current outstanding balance. This is the case with a line payment calculated on the amount of interest owed or as a percentage of the principal balance.

Term in months

Number of months for this loan or line of credit.

Federal tax rate

The marginal federal tax rate you expect to pay.

State tax rate

The marginal state tax rate you expect to pay.

Payment options

Payment options for your loan or line of credit. Each option uses a different method to calculate your monthly payment. Please note that only the Fixed rate term will pay off your balance by the end of the payment term.

Fixed rate term: Traditional amortization produces a fixed monthly payment. The monthly payment calculated will leave a zero balance at the end of the loan's term.
2%, 1.5% or 1% of balance: Your minimum payment is calculated as a percentage of the outstanding principal balance. Your minimum payment will change each month, and if you only make the minimum payment your balance will not be zero at the end of your loan's term.
100% of interest owed: For lines paying interest owed, your payment is 100% of the interest accrued during the month but no principal. Your payment may not be fixed if your interest rate or principal balance changes.

Tax savings

Tax savings assumes that you qualify for a home interest deduction and that you itemize your taxes on schedule A of your Federal tax return. Total tax savings may be less for higher incomes which have their allowable itemized deductions phased out. Your total tax savings may also be reduced if you prepay your loan.

Loan & Credit Line Tax Savings Calculator