Before you take out a personal loan, it’s important to compare your options and determine the best loan for your unique budget and needs. That’s where a personal loan calculator comes in. It can help you estimate your monthly payments and allow you to play around with different scenarios so you see how certain loans might fit your situation.
How to Use a Personal Loan Calculator
The goal of a personal loan calculator is to estimate your monthly payment based on a specific loan amount, interest rate, and repayment term. If you change one or more of the numbers, you’ll know how different loan offers will affect your monthly payment.
While a longer term generally means a lower monthly payment, it can also cost you more in interest. On the flip side, a shorter term will leave you with a higher monthly patent but could lead to lower total interest cost over the repayment term.
When to Use a Personal Loan Calculator
If you’re in the market for a personal loan, a personal loan calculator can come in handy. You can use it as you shop around and compare a variety of offers. It may help answer questions like “is this loan too expensive for me?” or “can I afford this loan?.” A personal loan calculator might also help you discover the ideal repayment term.
Why Consider a Personal Loan?
Now that we’ve covered the benefits of a personal loan calculator, let’s go over the basics of a personal loan. With this financial product, you can receive cash to cover various expenses. After you submit an application and get approved, the lender will distribute the funds in a lump sum. You’ll then pay back what you borrow plus interest and fees over an agreed upon repayment term. You might use a personal loan for:
- Car repairs
- Medical bills
- Home improvements
- Debt consolidation
- And much more!
How to Apply for a Personal Loan
Fortunately, many lenders offer online applications. Some will even let you prequalify or check your potential offers without any impact to your credit score. When you move forward with the formal application process, be prepared to authorize a full credit check, which can impact your credit.
You’ll also need to provide financial details like your monthly income and housing costs. In addition, the lender might ask you to upload documents like a government-issued ID, pay stubs, and tax forms. Upon approval, you may receive the funds that same day, within 24 hours, or in a few business days, depending on the lender.