Taking out personal loans or larger business loans can end up costing a great deal of money, and borrowers are often faced with a tough decision of whether or not to apply for one. Loan calculators aim to go some way towards helping people assess whether such a financial product is for them by calculating their potential monthly repayments.
Loan Repayment Calculators
A loan repayment calculator can be found on almost all loan websites on the internet because of the confusion customers would otherwise face if attempting to work out their loan charges and repayments. Online loan calculators can often give applicants immediate answers whereas visiting banks or other lenders usually comes with the hassle of having to wait to hear what sort of debt they can afford.
Loan payment calculators exist for two main purposes. The main question on every borrower’s mind is how much their loan will cost overall. By inputting the amount they wish to borrow with the interest rate and the loan term, the loan calculator will tell them exactly how much their monthly repayments will work out as.
For those on a tight budget who might only require a short term loan to see them through a bad patch, loan calculators also work out what a person could actually afford to borrow. They simply enter the monthly repayments they can afford with the interest rate and the term and it will calculate the maximum loan amount they will be lent.
Online loan calculator results vary from site and site depending on the loan lender and what sort of loan is being offered. A bank loan calculator, for example, may offer much lower interest rates than an independent loan lender would, though all bank loan calculators will offer different deals so it is worthwhile comparing as many as possible to find which banks, building societies, credit unions or other online lenders offer the best deals.
Personal Loan Calculators
A personal loan calculator is generally intended to assess smaller loan amounts than a business loan calculator is. Personal loans calculators can give borrowers a broad idea of what they could be liable to pay on amounts up to £25,000.
Business Loan Calculators
Business loan calculators must be used if a person wants to borrow more than £25,000 for commercial purposes. Interest may be calculated at a different rate than would be the case with standard personal secured loans or unsecured loans as business loans lenders have their own set of criteria when assessing borrowing requests.
Car Loan Calculators
For major purchase loans such as car loans and mortgages, there will be specific loan repayment calculators to help borrowers when making such a huge financial decision. A car loan calculator can help potential car owners to work out what new or used cars they can afford. Information about the price of a vehicle and any money that will be saved if part exchanging a current car will be used by car loan calculators to assess what a person’s monthly payments will be.
Mortgage Loan Calculators
A mortgage loan calculator is equally intended for working out the finance of pricier assets. Some mortgage loan calculators, however, only assess what a borrower’s interest payments will be if the mortgage will be linked to some sort of endowment – so a person must firstly be sure what sort of mortgage they want to take out.