For the month of April, we will be bringing you daily posts centered on our personal finances – saving, making and managing our money.
Getting a loan can be rather confusing. There’s all sorts of paperwork to fill out, and it’s full of legal terms that don’t make a lot of sense to your average Diva. And then there are the calculations involved. Unless you’re a real math whiz, it’s hard to figure out just how much you’ll be paying in interest, how much you’ll save by making extra payments, or which loan will ultimately be the least expensive.
Lucky for us, there are online calculators that can answer all of these questions and more. You just put in a little basic data, and the calculator figures up the rest for you. To get started, you’ll need the following information:
* Total loan amount
* Loan term
* Interest rate
* Loan start date
With these numbers, the calculator can tell you how much your monthly payment will be. You can use numbers you’ve obtained from lenders, or just play around with different numbers to see how they work out. This is especially useful if you know how much of a monthly payment you can afford, because you can determine how much interest you can afford to pay, and/or how long of a term you will need on a loan of a given size.
Some calculators can also tell you how making extra payments will affect your loan. You can input a certain amount to add to your payment each month, a certain number of extra payments each year, or a one-time lump sum payment. The calculator will tell you how much you can save in interest by making these types of payments, as well as how much sooner you can expect to pay off your loan.
There are also specialized loan calculators that will give you different types of information. There are mortgage calculators that will use your annual income, debts and money available for a down payment to determine how much you can afford to pay for a home. There are credit card calculators that will use your balance, interest rate and minimum payment to determine how long it will take you to pay the card off, as well as how much you will end up paying in interest. And there are loan calculators that will use the total loan amount and interest rate to tell you how much income lenders will expect you to make in order to qualify for the loan.
Using a loan calculator can help you choose the best loan. It can also help you determine how to pay the loan off as quickly as possible. Take advantage of these free online tools and save!