Loan Constant Calculator

✖Annual Debt Service is the total principal and interest payment owed on a financial obligation, such as a commercial mortgage loan, expressed on an annual basis.ⓘ Annual Debt Service [ADS]			+10% -10%
✖Total Loan Amount is the initial amount of the mortgage loan, which is the total borrowed amount.ⓘ Total Loan Amount [TLA]			+10% -10%

✖Loan Constant is the ratio of annual loan payments to the total loan amount.ⓘ Loan Constant [LC]

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Formula

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Loan Constant

Formula

`"LC" = "ADS"/"TLA"`

Example

`"3.2128"="803200"/"250000"`

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Loan Constant Solution

STEP 0: Pre-Calculation Summary

Formula Used

Loan Constant = Annual Debt Service/Total Loan Amount
LC = ADS/TLA
This formula uses 3 Variables

Variables Used

Loan Constant - Loan Constant is the ratio of annual loan payments to the total loan amount.
Annual Debt Service - Annual Debt Service is the total principal and interest payment owed on a financial obligation, such as a commercial mortgage loan, expressed on an annual basis.
Total Loan Amount - Total Loan Amount is the initial amount of the mortgage loan, which is the total borrowed amount.

STEP 1: Convert Input(s) to Base Unit

Annual Debt Service: 803200 --> No Conversion Required
Total Loan Amount: 250000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

LC = ADS/TLA --> 803200/250000

Evaluating ... ...

LC = 3.2128

STEP 3: Convert Result to Output's Unit

3.2128 --> No Conversion Required

FINAL ANSWER

3.2128 <-- Loan Constant

(Calculation completed in 00.004 seconds)

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Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

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< 16 Debt Management Calculators

Levered Free Cash Flow

Go Levered Free Cash Flow = Net Income+Depreciation and Amortization-Change in Net Working Capital-Capital Expenditure-Net Borrowing

Present Value of Outstanding Balance

Go Present Value of Outstanding Balance = Existing Payment*(1-(1+Rate of Interest per Annum)^(-Frequency of Payments)/Rate of Interest per Annum)

Home Equity Line of Credit

Go Maximum Line of Credit = Maximum Loan to Value Ratio*Appraised Fair Value of Equity-Outstanding Mortgage Balance

Breakeven Occupancy

Go Breakeven Occupancy Ratio = (Total Operating Expenses+Annual Debt Service)/Potential Gross Income

Average Payment Period

Go Average Payment Period = Average Accounts Payable/(Credit Purchases/Number of Days in Period)

Paid-in-Kind Interest

Go Paid-in-Kind Interest = Paid-in-Kind Interest Rate*Beginning PIK Debt Balance

Senior Debt Ratio

Go Senior Debt Ratio = Senior Debt/EBIT and Depreciation and Amortization

Mortgage Refinance Breakeven Point

Go Mortgage Refinance Breakeven Point = Total Loan Costs/Monthly Savings

Debt Service Coverage Ratio

Go Debt Service Coverage Ratio = Net Operating Income/Annual Debt

Mortgage Constant

Go Mortgage Constant = Annual Debt Service/Total Loan Amount

Solvency Risk Ratio

Go Solvency Risk Ratio = Total Assets/Total Long Term Debt

Loan Constant

Go Loan Constant = Annual Debt Service/Total Loan Amount

Debtor Days

Go Debtor Days = (Accounts Receivable/Credit Sales)*365

Annual Debt Service

Go Annual Debt Service = Principal+Interest Amount

Net Debt

Go Net Debt = Gross Debt-Cash and Cash Equivalents

Overhead Rate

Go Overhead Rate = Overhead Costs/Revenue

Loan Constant Formula

Loan Constant = Annual Debt Service/Total Loan Amount
LC = ADS/TLA

What is Loan Constant ?

A loan constant, also known as the mortgage constant or debt service constant, is a financial term used in real estate and lending to measure the proportion of the total loan amount that must be paid annually to cover the principal and interest. It represents a fixed percentage of the loan amount and remains constant throughout the loan's term, regardless of fluctuations in interest rates or changes in the loan balance. This constant is essential for both borrowers and lenders as it helps determine the level of debt service required for a loan and allows for better financial planning and risk assessment. Lenders use the loan constant to calculate the annual debt service payments, while borrowers can use it to understand the ongoing financial obligation associated with their loan.

How to Calculate Loan Constant?

Loan Constant calculator uses Loan Constant = Annual Debt Service/Total Loan Amount to calculate the Loan Constant, The Loan Constant is the ratio of annual loan payments to the total loan amount. Loan Constant is denoted by LC symbol.

How to calculate Loan Constant using this online calculator? To use this online calculator for Loan Constant, enter Annual Debt Service (ADS) & Total Loan Amount (TLA) and hit the calculate button. Here is how the Loan Constant calculation can be explained with given input values -> 3.2128 = 803200/250000.

FAQ

What is Loan Constant?

The Loan Constant is the ratio of annual loan payments to the total loan amount and is represented as LC = ADS/TLA or Loan Constant = Annual Debt Service/Total Loan Amount. Annual Debt Service is the total principal and interest payment owed on a financial obligation, such as a commercial mortgage loan, expressed on an annual basis & Total Loan Amount is the initial amount of the mortgage loan, which is the total borrowed amount.

How to calculate Loan Constant?

The Loan Constant is the ratio of annual loan payments to the total loan amount is calculated using Loan Constant = Annual Debt Service/Total Loan Amount. To calculate Loan Constant, you need Annual Debt Service (ADS) & Total Loan Amount (TLA). With our tool, you need to enter the respective value for Annual Debt Service & Total Loan Amount and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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