Working professionals go through the daily grind in pursuit of their goals. They could be buying a new car, securing a house and lot, or filling up their travel fund so they can start exploring the world. Whatever it is, some peopleconsider taking a loan to speed up the whole process.
If you are one of these individuals, be sure to compare personal loan rates before you finalize getting the loan. After all, you don’t want these rates to come back and bite you when it’s already too late.
This is where a personal loan calculator comes in. You can use this tool to inform you about the loan you are planning to get. But it provides you more than that. Find out what else it could offer you by reading all about them below.
Gives You In-Depth Information about Your Loan
You can utilize a personal loan calculator to learn its details even before you decide to get it. A few of these are the interest rate, the estimated monthly installment (EMI), the estimated total payment, and the flat interest rate.
- Interest Rate – As the name suggests, this is the interest charged by the lender to the borrower. (Formula: amount of interest ÷ amount of principal)
- Estimated Monthly Installment (EMI) – The payment the borrower must pay on a monthly basis. It covers the interest and the principal. (Formula: interest rate + principal amount)
- Estimated Total Payment – The total payment the borrower must pay over a certain period of time. It includes the total interest and the loan principal.
- Flat Interest Rate – This is the fixed interest charged to the borrower. (Formula: total loan x interest and term of loan)
Assists You in Budgeting Your Monthly Expenses
By using a personal loan calculator, you can find out your EMI. This means that you won’t have to do guesswork to find out how much you need to pay your lender every month. This gives you a heads up on the estimated amounts you need to set aside. Essentially, this may result in you never going above your intended budget for the month.
Allows You to Save For Your Future
This one goes hand-in-hand with the previous point.
Since you can properly prepare your monthly budget to include loan repayment, you also get to save up for your future endeavors. You won’t have to worry about not being able to save some of your hard-earned income simply because you are already paying for your personal loan.
Informs You How Long You Need to Pay for Your Loan
Another key detail that personal loan calculator provides is how long it will take you to pay off your entire loan.
However, you also get to have the option of choosing the duration you want to be paying your loan off. This tool will then recalculate your interest rate, EMI, estimated total payment, and flat interest rate base on the duration you choose to repay your lender.
As you can see, loan calculators found online can be of great help to those who are thinking of getting a personal loan—whether it be for paying for a well-deserved holiday, finally owning a car, or living in their own house and lot.