A loan calculator is an option offered by banks and other financial institutions to their clients to calculate the cost of a loan themselves. The loan calculator itself is informative, but it helps clients to create their loan repayment plan from the comfort of their own home and with just a few mouse clicks.
So they can see what amount they can really ask the bank for. The effective interest rate or actual cost of the loan is calculated using the credit calculator. The loan calculator also enables the calculation of a repayment table designed to assist the user in planning future installments, which makes it much easier to request loans for closing liabilities.
The effective interest rate is one of the most important criteria when evaluating the payoff of a loan because it expresses the true value of the loan much more accurately than the nominal interest rate. It shows how much money a customer, or borrower, will pay back to a bank or other financial institution. The effective interest rate, in addition to the nominal interest rate, includes all fees and charges payable to the bank or financial institution for the approval of the loan.
The effective interest rate does not include all other fees that are required to approve a loan and are incurred outside a bank or financial institution. These are, for example, notary fees and life insurance policies most often required when applying for home loans.
A repayment plan is a plan to pay off a loan over a period of time. Most often it is presented in the form of a war or an annuity. Repayment in installments is usually the most favorable option for the client because this method of repaying the loan pays a lower total interest compared to the total interest on repayment in annuities. But this repayment method basically requires more credit, since the initial installments are significantly higher than the annuities.
Annuities refer to equal amounts throughout the repayment period, and within these amounts, the ratio of the equity to interest changes over time.
The loan calculator is divided into a housing calculator, a car calculator, a savings calculator and a loan amount calculator.
A home loan calculator allows you to estimate the maximum amount of credit a client can make based on the input of net income and the cost of existing loans, if any. It calculates the estimated effective interest rate and monthly installments for repayment of the home loan or annuity. The amount depends on whether the client uses the co-borrower and / or guarantor or whether they will raise the home loan themselves.
This vehicle calculator works on the same principle as a residential calculator. It most often requires the entry of the desired amount itself, the nominal interest rate, insurance, reimbursement and participation if there are insurance costs. On this basis, the calculator throws out a monthly loan amount and a repayment plan that enables the client to plan and buy a motor vehicle more easily.
Savings calculator allows you to calculate interest on term savings. In addition, some of the calculators provide insight into the status of earned interest.
This type of credit calculator allows you to quickly evaluate your own credit. There are two options, applying for a loan individually or with the help of a co-debtor or guarantor.
The amount of credit depends on that. It is necessary to enter in the loan calculator the own income and income of the person who will be the co-debtor ie the guarantor, the number of years of repayment and the interest rate. Based on this information, the calculator eliminates the monthly annuity and repayment plan.