Even with planning of course, you might still need to take a loan. Yes ideally, we would all love to live without taking a loan. But how many of us succeed in doing this? So when you are asking for that loan, what you need is good financial planning that will prepare you for the days, months and the years ahead. It all begins with a good understanding of how the loan works. And this is an area where a personal loan calculator can help you.
Many people believe that a personal loan calculator will just compare the various available offers to reveal the best percentage at which the loan is offered. At best it can also do a comparison of the repayment period. The fact is, the personal loan calculator can do a lot more than that. It can help you in your financial planning, without you needing to be an economist. In other words, it is a great tool for the regular everyday Joe.
Here’s How the Personal Loan Calculator Can Help You
It can help you find out how much you need to repay – When you are taking a loan, the lender will inform you about a few things such as the total amount of loan approved, the term for which it is approved and the interest rate. Of course since you have to pay the interest along with the principal amount, you will end up paying much more than you took. The lender will never tell you about the extra amount you will end up paying. Personal loan calculator will help you find this out. Once you know the figure, you can decide whether it is wise to accept the loan or not.
Extra payments – Once you have taken the loan, you are expected to pay back a part of it each month for a pre-decided period of time. If you can, it is always advisable to pay back more each month if the lender agrees to this. This will allow you to stay on top of the loan and get out of debt quickly. Your personal loan calculator can help you find out how much extra you will need to pay each month for reducing your debt by a specified number of months. Use your personal loan calculator to adjust this till you reach the comfortable level.
Loan comparison – Comparing just the interest rates of the various offers is never enough. You should compare various other factors such as the term of repayment, the charges and fees, late penalty, introductory rates and others like this. This will help you find out the relative benefits of one offer over another. Only this approach will help you arrive at the right decision. A really good personal loan calculator should be able to do this as well.