Personal Loans Calculator
When you need quick cash for a major expense, a personal loan might be the way to go. But before you borrow any money, it’s important to know how much you can afford to take out.
By using a personal loan calculator, you can determine how much money you can afford to take out and how much interest you’ll have to pay over the course of your repayment term.
Why Use a Personal Loan Calculator
One of the biggest mistakes borrowers make is taking out more money than they need or can even afford.
While it can be tempting to take out as much as your lender will let you, this can lead to you not being able to make your payments on time. Although personal loans are typically unsecured, so you won’t have to sacrifice any major assets, this can still be devastating to your credit score.
By using a calculator before borrowing any money, you can be sure that you’re able to pay back what you borrowed on time and in its entirety.
What Information Do You Need?
To use a calculator, you’ll need a few key pieces of information from your lender:
● Total Amount: The total amount of money that you plan to borrow.
● Term: The length of your repayment term in years or months.
● Interest Rate: The amount charged by the lender to borrow the money.
Additionally, some calculators may ask you to plug in additional information, such as your credit score and zip code, to provide estimates from lending partners. This can be a major help if you haven’t already found a lender.
Alternatively, if you haven’t yet started shopping for lenders, you can plug in the numbers that you expect to be offered by lenders.
Personal loans are available from a wide variety of lenders, including banks, credit unions, online lenders, peer-to-peer lenders, and more.
Every lender will have different interest rates, eligibility requirements, repayment options, fees, and other factors, so it’s important to use a calculator to compare lenders and find the best option for you.
Make sure to get pre-approved by multiple lenders to get a good idea of what rates and terms you can expect. Pre-approval allows lenders to perform a soft credit pull and use this information to provide you with a preliminary offer.
This process won’t impact your credit score, and once you begin receiving quotes, you can plug the numbers into a calculator to find the true cost of the loan.
Based on a $10,000 loan, excellent credit score with a 14% interest rate on a 1 year term