Loan Constant

Filed Under »
Dictionary Says

Definition of 'Loan Constant'

An interest factor used to calculate the debt service of a loan. The loan constant, when multiplied by the original loan principal, gives the dollar amount of the periodic payment. The loan constant can be used to compare the true cost of borrowing. Given the choice of two loans, a borrower will generally opt for the one with the lower loan constant, since it will have the lower debt service requirement.
Investopedia Says

Investopedia explains 'Loan Constant'

As a simple example, a loan constant of 8% on a loan of $150,000 would imply a debt service requirement of $12,000 annually.

Loan constant tables were widely used in the real estate industry before the advent of financial calculators, since they made it relatively easy to calculate monthly mortgage payments.

Related Definitions

Search results for

'Loan Constant'

  • Portfolio Management Pays Off In A Tough Market

    http://www.investopedia.com/articles/stocks/09/constant-mix-buy-hold.asp
    ... Conclusion Most professionals working with retirement clients follow the
    constant-mix rebalancing strategy. ... $30K Home Equity Loan, 5.74%, 5.77%. ...

  • Reduce Interest With An All-In-One Mortgage

    http://www.investopedia.com/articles/mortgages-real-estate/08/offset-mortgage.asp
    ... Assuming that the rate on the accelerated loan stays constant at 6%, it is possible
    for Dan to pay off his loan in just under 15 years and still have the ...

  • Financial Institutions: Stretched Too Thin?

    http://www.investopedia.com/articles/fundamental-analysis/08/loan-portfolio-analysis.asp
    ... pretty straightforward. Payments are comprised of interest and principal
    and remain constant throughout the life of the loan. As the ...

  • How can I use an "airbag swap"?

    http://www.investopedia.com/ask/answers/08/airbag-swap.asp
    ... Typically, an airbag swap consists of a pay-fixed, receive-floating structure with
    a rate tied to a constant maturity swap (CMS ... $30K Home Equity Loan, 5.74%, 5.77 ...

  • Wall Street History: Poor Richard And Jack Welch - Investopedia. ...

    http://financialedge.investopedia.com/financial-edge/1210/Wall-Street-History-Poor-Richard-And-Jack-Welch.aspx
    ... IN PICTURES: Top 10 Forex Trading Rules. Getty Oil J. Paul Getty was a constant
    forerunner for the richest man in the world from the 1950s onward. ...

  • On This Day In Finance: June 4 - The Birth Of The Modern ATM ...

    http://financialedge.investopedia.com/financial-edge/0609/Today-In-Finance-June-4---The-Birth-Of-The-Modern-ATM.aspx
    ... Following the awarding of the patent in 1973, ATMs begin to spread across
    the nation and have remained a constant in consumer banking. ...

  • Texas Ratio Not The Holy Grail

    http://stocks.investopedia.com/stock-analysis/2008/Texas_Ratio_Not_The_Holy_Grail_ITYC_IDMC_WB.aspx
    ... That capital and reserves will stay constant. A bank typically adds to its loan
    loss reserves every quarter and can raise capital as well. ...

  • The New Mortgage Business: More Than Just Loans

    http://www.investopedia.com/articles/mortgages-real-estate/09/new-mortgage-business-loss-mitigation.asp
    ... Establishing relationships with banks and existing loan servicers will provide
    specialists with a constant stream of prequalified needs-based prospects. ...

  • Why Following Financial Trends Can Hurt Your Future - Investopedia ...

    http://financialedge.investopedia.com/financial-edge/1011/Why-Following-Financial-Trends-Can-Hurt-Your-Future.aspx
    ... Sometimes that pattern is limited to particular segments of the market or
    the globe. But the pattern is fairly constant. Financial ...

  • Reinventing Brands: Makeover Or Move Over - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0212/Reinventing-Brands-Makeover-Or-Move-Over.aspx
    ... Filed Under: Business. Brands need to be treated like organic creatures that
    grow with constant nurturing. A brand's reputation stays ...

Related Articles

Partner Links