Are You Looking to Apply for a Personal Loan?
Using a Personal Loan Calculator is a great first step in any decision to take a loan. It can help you figure out loan payments to ensure the amount you want to borrow fits your budget.
Here’s how a personal loans calculator works:
- Enter your loan amount, interest rate, and payment frequency in the spaces provided.
- Next, hit the “calculate” button!
- Wait a couple of seconds. You’ll get the monthly loan payment amount, total interest amount to be paid, and total loan amount.
The First Step to Getting a Personal Loan
Before applying for a personal loan, you need to know your net worth. Use our handy net worth calculator below to determine where you stand. You can print out or email yourself the results. Most lenders will need this.
Once you have this information, read the remainder of this article so you understand the ins and outs of personal loan calculations. This is best done by the lender using their calculator and data. Now, you’ll be armed with what they need (your net worth calculations), knowledge to understand their calculations.
How a Personal Loan Calculator Can Help You Get Back On Track
A Personal Loan Calculator can help you determine if you can afford the loan before you apply. When planning your finances, it gives you the opportunity to adjust different factors and terms to fit your needs.
You can adjust the term options and payment frequency. You are free to play around with them until they fit into your budget. You can adjust the loan sum when necessary too.
This is why using a Personal Loan Calculator is such a vital step when applying for a loan. It can help you with your short and long-term goals around lending. Plus, the results are instant. You know where you stand.
If the numbers fit your budget, you can move forward with applying for your personal loan. You know the interest rates and terms you’re looking for. If the numbers don’t fit your budget, then you can look at other options. You don’t need to waste time going through the application process.
Many people use a loan to consolidate their debt. For example, to consolidate debts racked up on credit cards. This is because the interest rate is often more favourable. If this is the case, you can still use the tool before making an application.
All you need to do is adapt the data you add to the calculator accordingly. For example, you would extend the number of monthly payments to terms that are used with debt consolidation loans. This will help you with your monthly budget and help you make a final decision.
Personal Loan Calculator – Definition of Financial Terms
A list of financial terms, below:
Personal Loan:A financial contract between a lender and a borrower of money. The borrower takes a principal sum in which they will pay back in full, over a payment term. Personal loans are used for a variety of reasons, everything from home improvements to paying back a personal credit card.
Loan Amount:The amount someone is looking to borrow from a lender.
Payment:The amount of money paid to the lender from the borrower on a specific date. Payment frequency and terms help to outline payment dates.
Loan Payment Frequency:This reflects the number of times a payment goes out each year. Many people choose monthly payments, some choose bi-weekly, and others go for weekly. It’s important to note that weekly and bi-weekly payments will usually pay a loan off faster.
Bi-weekly and weekly payments are less than a monthly payment and are made more times in the year. As such, the principal amount and interest rate amount lessens. Often it can depend on how you get paid. For applicants who are paid weekly, having weekly repayments make managing money easier.
Here’s a breakdown:
- Monthly = 12 payments per year
- Bi-weekly = 26 payments per year
- Weekly = 52 payments per year
Payment Term:The number of years you have to repay your loan amount. The payment term can range from one year to 10, depending on the type of loan you take out. In rare cases, you can have shorter loans.
Number of Payments:The number of times a payment is made throughout the tenure of a loan.
Interest Rates:The yearly interest placed on the loan. The calculation is for every payment period, which depends on the frequency of the loan. The balance of the loan is also taken into account for interest rates.
Principal Amount:The amount of money borrowed, without the total interest added.
The Bottom Line
It’s important to remember that credit and loans can place you in debt for a significant amount of time. Whether your payment term is 1 year or 10, you are responsible for repayments for the period you sign off on. Failing to do so will have consequences that can affect your credit report and credit score. Apart from ruining your credit, It can also place an added financial burden on your plate.
So, it’s vital to make an objective and informed decision when it comes to taking out any lump sum loan. This is where a loan calculator can help. It not only factors in the costs of the payment amounts. It also allows you to tailor a loan to fit your budget. It can also help you make a decision. It helps you to decide if it’s right to apply for credit or to look at other options.
If you decide to apply for a loan, we can also help you find the right loan to match your needs. It can also help with lines of credit and the best interest rate available.
It’s important to note that our online Personal Loan Calculator is a tool that anyone can access. It is free to use, and you are under no obligation to apply for a loan at any time. No personal information is required when using the tool, and you have complete anonymity.