Personal loan calculator
Thinking of taking out a personal loan but not sure if you can afford the monthly loan repayments? If so, then it is a good idea to use a personal loan calculator.
What is a personal loan calculator?
A personal loan calculator is a web-based program found on personal loan web sites that can be used to help borrowers determine how much a personal loan will ultimately cost them. Based on three basic inputs (loan amount, interest rate & loan duration), it can provide borrowers with a schedule of monthly personal loan repayments for different interest rates and loan repayment periods. The calculator can also be used to arrive at the total cost of a personal loan when the loan amount and total interest accrued are added together.
For borrowers with a known monthly repayment figure in their minds, a personal loan calculator may be used to determine the total amount that they can afford to borrow based on that loan repayment figure. So, if you know that you can only make £100 available each month for repayment of a personal loan, the loan calculator will ask you to enter this figure along with the number of months that you can keep up these repayments and the interest rate of the personal loan product you are interested in. The loan calculator will then compute the total amount that you are able to borrow.
The personal loan calculator really comes into its own when you want to compare and contrast different personal loan offers from several lenders. To do this you'll need to collect together the various loan terms, including interest rates and the personal loan repayment duration for each offer. You can then plug these figures into the loan calculator to determine your monthly repayments and total loan cost.
When comparing the cost of personal loans on a loan calculator there are a couple of things you should bear in mind: -
1) To get a true cost of the total loan amount and monthly repayments on a loan calculator be sure to factor in the main APR once any discounted rates have expired. A loan calculator may require you to make two separate calculations to arrive at this total cost where a discounted APR and standard APR are used.
2) Be sure to factor in the personal loan arrangement fee. This is a separate fee charged by the lender, and is normally added onto the personal loan amount to be repaid across the life of the loan. It can therefore be added to the total loan amount in the relevant calculator field.