Loan Calculators

Loan Calculators Help You See the Terms of Your Loan

Loan calculators are very versatile programs that you can use to optimize your loan situation, to help you look for a package that is best suited to your needs. Before you use any of these programs you have to know what you are counting, and what it means. Please remember that calculations are not everything, to get the most out of  a loan situation you have to be able to understand some basic mechanisms.

The most basic loan calculator is actually an amortization calculator which calculates your monthly payment based on your loan amount, your loan term and the interest rate. This will give you a sum that is the theoretical amount you will have to pay each month. Again, keep in mind that these are numbers based on a very simple mathematic formula and banks take other factors into account too.

The web pages of banks all have some or many types of loan calculators, fit to handle many different situations. There may be a mortgage calculator, a leasing calculator and so on. It may be that the most basic calculations vary for different banks. This is a result of the variation in packages that banks offer. Leasing deals will differ from bank to bank because one might offer a longer maturity, while the other will give you different interest. They usually tune their calculators to their own packages so don't be surprised to find a different sum for each page. They do however give you some consistency in that each calculator will give you a round-about correct sum, one that you can at least base your financial schemes on.

Some loan calculator will enable you to add special features like calculating the impact of extra payments on bankrate.com. This website will offer you tools for car loans, mortgage and various other financial items. A calculator on Quicken.com will give you a great visual representation of how the monthly payment is affected by the change of the factors in the equation.

It is important that you don't try to rely purely on a loan calculator. It is sometimes just not that simple. If you work freelance and have earned $10.000 for a few months, but your average is $5.000, don't take out a loan that has an $8.000 pay-back rate. Ok, this was a weird example, but you get the idea. You have to take into account that your life, and maybe even your income, can't always be put into numbers. Always have a sort of perspective widening lens with you, try to look beyond what the numbers are telling you and incorporate anything else that may come up as a factor yourself.

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