Whether you have a loan or you’re looking at your current loan options, a personal loan calculator can absolutely come in handy for your finances. Are you using it to its full potential? We cover how you can make the most of it for your loans in this article.
Make Sure Your Information is Accurate
One thing to remember upfront about personal loan calculators is that, in most cases, the only person who will see it is you. It’s important, to be honest about your finances, the loan, and your credit score. This will help you get the most accurate picture of your finances to date and what the loan will mean for your budget in the coming years.
Personal loan calculators generally ask for
- The loan amount
- Loan purpose
- Interest rate
- Loan term
- Annual Income
- Credit Score
Different personal loans may require different calculators, so make sure you’re selecting the correct loan purpose (or using the right calculator) to get the correct picture for your repayment. Some types may also not ask for the interest rate, but rather show you what your interest rate may be after you fill out the form.
Use A Personal Loan Calculator to Get an Idea of Your Options
Personal loan calculators are there to give you an idea of your options – the results are not set in stone and you may not get those exact offers from lenders (especially if any of your initial information was inaccurate). However, starting here can give you a starting point to plan ahead for your budget and see what type of loan would be best for your needs.
Always shop around when choosing a loan. Many calculators will give you options right after you hit submit, but be sure to compare several before deciding on one that is right for you.
Use it to Figure Out Your Repayment Schedule on New Loans
In some cases, you may allow the personal loan to determine the repayment schedule. However, in other cases, you can play around with the payment options to see which best fits your budget and needs.
You first need to ask yourself how much can you afford each month when paying off the loan? Then you also need to consider how fast you want to pay it off. If you’re wanting to completely pay it back in two years, your monthly payments may be high, so always review your budget to ensure you can make those payments on time. Failing to do so can hurt your credit score and rake in fees.
Use it to Figure Out Your Repayment Schedule on Existing Loans
Say you already have a loan, but you’ve come into more money. In most cases, you can pay above the minimum amount and start working towards paying that loan off faster. A personal loan calculator allows you to determine how long it would take to pay off with the new, larger amount, giving you more insight into your budget and finances.
A personal loan calculator is a valuable resource that shouldn’t be ignored, especially if you’re looking for a new loan or need to recalculate your current finances. They can absolutely get you on the right path when you need a personal loan.