Thinking about getting a personal loan? Whether you’re looking to buy a car or another type of vehicle, or you need money to fund your vacation, or perhaps a home renovation project, or pretty much anything else, a personal loan can certainly be a great option for you. Sure, you’ve most likely thought about other financing solutions.
For example, you may have been thinking of borrowing money from your friends or family members, promising to repay it as soon as possible. While I don’t doubt promises, and while the people close to you probably won’t doubt you either, the truth is that you never know what can happen, meaning you may not be able to repay the amount you’ve borrowed that quickly. This, of course, can lead to jeopardizing your relationships with those people.
On top of that, when you are in need of a higher amount, there’s a great chance that most people won’t have that much cash just lying around and ready for you to spend it. In short, the idea of borrowing money from the people you know is not only wrong because it could damage your relationships, but also often impossible to turn into reality, given that most individuals don’t have great amounts saved. Depends on who your friends are, of course, but it’s always best to keep money out of those relationships.
This, of course, means that a personal loan is your best shot at getting the money you need and funding anything you want with it. Naturally, you won’t jump right on board and apply for one of those loans immediately, before taking the time to check out several options and decide which one could be best for you. How can you check them out and compare them, though? By doing proper calculations, of course!
Read about some reasons why you should consider borrowing money this way in the first place: https://lanterncredit.com/personal-loans/benefits-of-personal-loans
So, the trick is in doing proper calculations when aiming at comparing the different loan offers you can get. Yet, doing those calculations alone can often be difficult. Or, you may find it easy, only to realize afterward that you haven’t exactly done it right. A personal loan calculator is, fortunately, there to help! Figuring out why you should use it, as well as how to use it the right way will put you on track towards finding the best personal loan for you.
Why Use a Calculator
Since you want to get a better understanding of why you should be using a personal loan calculator, as well as how to use it the right way, those are the two questions I’ll answer for you below. Starting with the one regarding the reasons why using this tool is important and why it could be beneficial for you. Below, I’ll list some of those reasons, hoping to make the role of this tool quite clear and to explain how helpful it can be in the entire process of getting a loan.
1. It Provides You With an Accurate Overview of Your Costs
Understanding precisely how much a specific loan will cost you before you get to the part of starting to repay it can be quite difficult for most people. The calculations you do in your head somehow always turn out to be different than the calculations the lenders wind up doing. Why? Probably because you’re not doing this the right way and you are, thus, getting inaccurate results. With the help of a calculator, though, you’ll get an accurate overview of the costs of your future loan. And, getting an accurate overview helps you figure out if you’ll be able to repay everything on time or if you would be struggling financially if you decided to enter into an agreement.
2. It Allows You to Compare Different Loan Options
Not every loan agreement will be the same, though. In other words, different lenders have different things to offer, meaning that the costs of working with them will also differ. One thing you should absolutely do before agreeing to any kind of loan solution is compare numerous ones, aiming at figuring out which one could be best for you. So as to do the comparisons the right way, of course, you’ll need to have everything properly calculated, and that’s when this tool will come in handy. Basically, it will allow you to easily compare different loan options.
3. It Is Easy to Use
If you’re worried that these tools are complicated and that you’ll have a hard time using them, no reason to be. As long as you find the right consumer loan calculator, that is, the right personal loan calculator, you’ll have no trouble using it at all. Nothing complicated about these tools, as they simply require you to input a few important pieces of information and provide you with the info you need regarding the loan costs and monthly installments. We’ll talk about how to use it later, though.
4. It Saves You Time
Another great reason why you should be using these calculators is that they can save you a lot of time. Instead of contacting one lender after another, aiming at getting clear info regarding the costs of their loans, or instead of hopelessly trying to do the calculations yourself, you can just input the necessary data and get all the info right away. Thus, you won’t spend ages searching for the right loan offer, because the calculators can help you find them easily.
5. And Simplifies the Loan Planning Process
In a few words, a loan calculator helps you simplify the entire loan planning process. You’ll get to see how much money you’ll need on a monthly basis so as to repay the loan, and you’ll get to plan the repayment period accordingly. With proper planning, you won’t have a difficult time making the payments and getting rid of the debt.
How to Use It Correctly
Having understood the significance of a personal loan calculator, and the role it plays in your planning process, you’ll now want to use one right away. Not before you learn how to use it correctly, though. If you visit a few great websites providing you with great calculators, you’ll see that the process of using them is not complicated. Yet, you should understand what to do in advance, so that you can get the most out of the tool.
1. Find a Great One First
It all begins with finding the perfect calculator for you. Naturally, there are quite a lot of great ones out there, so you absolutely won’t have a hard time finding those. Still, taking the time to check a few different ones out and choosing the one you believe is the most reliable option is a must. Choosing tools provided by reputable websites and by reliable lenders is the right thing to do. Also, nobody is stopping you from trying a few different ones out.
2. Use the One Provided By the Lender You’ve Chosen If Possible
In case you’ve already chosen a lender you want to work with, using their calculators is the best possible idea. That is, of course, if they are offering them. So, check the website of the lender you’ve selected, and check if they offer this tool because that’s how you’ll get the most accurate information.
3. Input the Amount You Want to Borrow
After you’ve chosen the personal loan calculator you want to use, you’ll just have to input the right data into it and wait for the results to pop up. Unsurprisingly, inputting the amount you want to borrow is actually the first thing to do. This is a piece of information that the tool will undeniably need so as to provide you with correct calculations, letting you know precisely how much you’ll have to pay to the lender on a monthly basis so as to finally repay the entire loan and get rid of the debt.
4. Input the Tenure
Of course, if you really want to get accurate information, and you definitely do, you’ll have to input the tenure as well. The monthly installments will depend on the repayment period, as well as on the amount you’re borrowing. The longer the tenure, the lower the monthly installment will actually be, but that also means you’ll spend more time repaying the loan and you’ll pay more interest overall. The calculator lets you play around with the tenure, hoping to find the best solution for you.
5. And the Interest Rate If Necessary
In some cases, you’ll also have to add the interest rate information to the calculators. This is if you’re not using the tool provided by the actual lenders you’ve already chosen to work with, because if you are, then the interest rate will probably be automatically added to the mix. If the rate isn’t automatically provided, you’ll absolutely have to input it, so as to get a clear idea of the amount of overall interest you’ll have to pay and so as to, thus, find the perfect personal loan solution for you.
Kim Marks 