Are you new to the concept of borrowing money? Would you like to know more about taking out a personal loan, but would rather do so practically rather than reading through pages and pages of information? If so, this simple loan calculator may be the answer. It is designed for those who are new to loans, and wish to simply look at the figures. How much they can borrow and at what rate, how long it will take to pay back, and most important of all: what kind of amount they will expect to pay each month as a result. The calculator requires only a handful of figures, so do shop around and look for the best rates before using it.
While this loan calculator is very simple and is designed for those who are new to the concept of personal loans, it is worth going through an example just to show how the calculator works. To use a simple example, someone wishes to borrow a total of $5,000 to be paid back over the course of 3 years. We therefore enter the figure into “Loan Amount” and 36 months into “Loan Length”. Finally, the interest rate offered by the lender given the person’s repayment and credit history is 5%, so we enter that underneath. As a result, we are shown that the monthly payment will be around $150, the total interest be paid will be $395, so the total cost of the loan $5,395.
How to use it
Using the loan calculator is simple: begin by entering the amount of money you wish to borrow into the “Loan Amount” box. Some lenders will only give out certain amounts depending on your circumstances and credit rating therefore it is best to research these first. Secondly, enter the length of the loan into the box marked “Loan Length”. Again, it is important to research the various lengths offered by your lender beforehand, and be sure to enter the figure in months rather than years. Finally, enter the fixed interest rate offered by your lender. Upon selecting calculate, you will be shown a monthly payment figure, as well as totals for the amount of interest and total amount to be paid.