Almost every one of us has experienced borrowing money from someone else in order to help pay for unplanned expenses. For some, loans are a natural part of their lives which helps them get through their day to day activities. Today it has become relatively easier for just about anyone to apply for personal loans with banks and other related establishments setting up and integrating their services over the internet. This in turn makes it positive for their clients to borrow money at any given time when the need calls for them to do so. Applying for personal loan is easy; however, a number of individuals often get into trouble during repayment. Let us look at some of the factors that come into play when calculating your personal loan.
Familiarizing Yourself with Loan Terms
Before you start calculating your personal loan, it is a good idea to become more familiar with the terms used by banks to help avoid confusion. This can help you save time as you don’t need to have these terms explained to you.
Amount of loan, for instance, is a pretty straightforward term that is used to describe the total amount that you intend to borrow.
Tenor, on the other hand, is the length of time until the loan is due.
Interest Rate is defined as the amount charged and expressed as a percentage for the use of money by a lender to a borrower.
Estimated Monthly Installment is the fixed payment amount made by a borrower to a lender which is to be paid at a specific date each calendar month.
Estimated Total Payment, just as the name implies, is the total cash out to be made on the loan over the specified period of time. It should be noted that the payment also consists of Loan principal and total Interest.
Last but definitely not the least is the Flat Interest Rate which is a term used as the fixed interest charged to the loan.
Calculating Your Personal Loan
Now that we have loan terms out of the way, we can start factoring how much you will be paying for your loan including the interest. The principal amount is the base amount of what you are looking forward to borrow. Loan term will also have a huge contributing factor on how much you will be paying for your personal loan.
Shorter loan terms are considered to be ideal as they have less interest, but they require higher repayments. Longer loan terms, on the other hand, will help greatly reduce your monthly repayments. However, the interest will often cost more as a result. Finding a good measure of balance with your loan terms will definitely go a long way in helping you find success with your loan endeavors.
Another factor that will add up to your personal loan is with how you plan on repaying them. People who decide to pay weekly will receive less interest, allowing them to save a substantial amount of money as a result. Something that you need to consider with your repayment amount is that not all of it goes to paying off your loan directly since a part of it is paid to your interest first. Borrowers have the option to fully pay for their loans in lump sum at any time which is great for those who are worried about their interest rate.
Make Use of Online Resources
It is good to hear that modern technology has contributed greatly in making a variety of our day to day tasks more seamless and hassle free. Personal loans have benefited from such technology, and this can be seen in the existence of loan calculators. Looking up loan calculators over the internet will yield a huge amount of results in just a couple of seconds. A huge number of banks have setup and integrated their services over the internet which include having their own personal loan calculator. This helps them save a fair amount of time and enjoy convenience as a result.
Don’t Be Afraid to Ask Help
It should be noted that loan calculators will only give you a rough estimate on how much you will be paying for when you decide to borrow money from a bank. Those who want to have a much clearer overview with their personal loan may want to consider getting in touch with somebody from loan assistance to receive help. These individuals will be more than happy to help you with your concerns answering questions and other related enquiries with regard to your loan application. Having them by your side can give you a sense of confidence and relief knowing that readily available help may be provided.
Borrow Money Wisely
If you are worried about applying for a personal loan, then you may want to consider the reason why you are getting one. You will need to determine if the reason is valid and worth the time and effort of repayment especially since it will take a fair amount of time to clear your debt. It is also a good idea to set realistic goals with regard to your personal loan, thinking ahead about how you can afford to pay it back in the future. You may also want to consider your budget on all levels, including your yearly, monthly and weekly expenses.
It is important to note that unforeseen circumstances may happen in your life. There may be changes in your life that were not entirely planned such as getting sick or perhaps having kids. All of these factors are important and need to be considered since they will have a huge impact in your capacity to pay for your personal loan.
Regardless of how much money you will be borrowing, it is a good to get in touch with a personal loan assistant as early as possible. Doing so will ensure that you will be able to receive your personal loans in a timely and orderly manner with little to no delay.
Also don’t forget that using a loan calculator all the time can help you avoid debt problems in the future.
As a licensed money lender, Bugis Credit aims to help you get out of your financial difficulties during trying times. We look forward to serving you, call us today!