Loan Calculator Wonders: Achieving Financial Goals Made Simple

Loan Calculator Wonders: Achieving Financial Goals Made Simple – Personal loans are an option for big ticket purchases or financial emergencies. But before taking out a loan, most of us want to know the cost of everything. Another way to find out is to calculate the amount using a personal loan calculator in Singapore.

So what are the benefits of a personal loan calculator and how does it work? Let’s find out.

Loan Calculator Wonders: Achieving Financial Goals Made Simple

A personal loan calculator helps you calculate the total amount of your loan. It applies to factors such as monthly payment and interest, loan amount required, interest rate and loan term based on your financial situation.

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It is a useful tool that helps you plan your finances and check your borrowing capacity. Additionally, he can market the loan products that best suit your needs.

What are the benefits of using a personal loan calculator in Singapore? 1. Calculate the appropriate interest rate

With a loan calculator in Singapore, you can determine the interest rate that is right for you based on the required loan amount.

This way, you can find out whether it is better to get a low long-term interest rate or a high short-term interest rate.

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Equal monthly installments, also known as EMIs, are fixed payment amounts used to pay both the principal and interest until the loan is fully repaid.

EMI can be calculated using two methods: 1) fixed rate method or 2) reducing balance method. The fixed rate EMI method uses the method of adding the loan principal and interest and dividing the result by the number of months.

For example, if you borrow S$500,000 at 3.50% interest for 10 years, the EMI is calculated using the lower of the interest method as S$5,625 or (S$500,000 + (S$500)000 x 10 x 0.035)) / ( 10 x 12).

On the other hand, EMI under the reducing balance method is calculated using the formula: (P x I) x ((1 + r)n)/ (t x ((1 + r)n)- 1). P is the principal amount borrowed, I is the annual interest rate, r is the periodic monthly interest rate, n is the total number of monthly payments, and t is the number of months in the year.

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Too complicated? However, a personal loan calculator can help you figure it all out. You can change the EMI amount and the number of EMIs that suit your monthly budget. By knowing your EMI, you can decide exactly how much you should set aside for your loan every month and for how long.

A personal loan calculator can help you check whether you qualify for a loan in Singapore. You must enter information such as your annual income and credit score to correctly calculate your credit.

With your data, the loan calculator can offer the right loan packages that suit your approach and financial situation. This saves you time from looking at packages that are out of your control and focuses your attention on what is right for you.

With a personal loan calculator, you can plan and manage your finances more effectively. You can check if you want to reduce your monthly expenses, take a longer loan term or borrow a smaller amount.

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Now that you know the benefits of a personal loan calculator in Singapore, you might be curious about the different jargons used. What exactly is the term of the loan? What is the core value? Let’s go deeper.

In the context of lending, principal refers to the amount borrowed. It can also refer to the amount due.

For example, if you take out a personal loan of S$50,000, the principal amount is S$50,000. After paying S$20,000, the principal balance is now S$30,000.

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Shorter loan terms mean higher repayment rates with lower interest rates in the long run. On the other hand, longer-term loans with lower payments can be more expensive in the long run due to accrued interest.

For example, if you borrow S$20,000 with a fixed term, at 8.75% per annum, you will pay:

The table above shows that although the monthly payment amount for a 3-year loan term is higher than that for a 5-year loan term, you will pay S$1,953 more in interest for an additional 2 years longer term of the loan.

In this case, a shorter-term loan may be better because you pay less interest in the long run. However, you should always borrow within your means. If you cannot afford a higher monthly payment, you should choose a longer loan term or loan terms that you like.

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The repayment plan shows the structure of the repayment method of the loan. You generally have the option of paying weekly, bi-weekly or monthly. Regular payments can mean a lower interest rate because your principal is paid off sooner.

However, committing to a weekly payment schedule can be tough on your budget. So, make sure that your budget can cover your payments and expenses without creating another financial problem for yourself.

The interest rate is the rate charged to the borrower for the loan. When you take out a loan, there are 2 types of interest rates: the advertised interest rate and the effective interest rate (EIR).

The advertised rate is also known as the nominal rate. This also applies to the interest rate at licensed moneylenders or banks.

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The effective interest rate, or EIR for short, takes into account other fees such as administration or processing fees. Not only that, the EIR looks at the cumulative effect of both the loan term and repayment schedule.

Essentially, the EIR shows you the actual cost of the loan. Choosing a loan with a lower EIR can mean lower costs for you. Therefore, you should use the EIR when comparing different credit products to get a complete picture of your credit.

Understanding how interest is calculated can help you manage your payments and save on the amount you owe. In Singapore, interest on loans such as car loans or personal loans is usually calculated at a lower rate. Interest rates will remain fixed throughout the term of your loan.

First, divide your interest rate by the number of payments you’ll make per year. If you make monthly payments, your number of payments is 12.

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If this is your first payment, multiply it by the entire principal instead of your balance. This calculation will give you the amount of interest paid in the first month.

Here is the S$30,000 loan principal, 6-year loan term, 8.40% interest per annum and monthly payment schedule:

To calculate the interest for the following months, you must first calculate the new balance on your loan:

To make things easier, it’s better to use a spreadsheet to do the calculations automatically. You can predict all your payments and interest for the coming months. This will help you manage your expenses better.

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However, remember that your loan may be calculated differently depending on your lender. So consult them.

If this all sounds too boring, then fear not as there are online personal loan calculators that can help you work out these numbers in no time.

In emergency situations, a personal loan can be convenient and useful, especially if you do not have an emergency fund. This is because personal loans usually do not require guarantors, are unsecured and have fast processing and approval.

A personal loan can also be useful as it usually has a fixed repayment period and thus gives you confidence in taking such money. They usually come with low interest rates and those interest rates stay the same, giving you the ability to plan without changing your budget regularly.

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If you’re struggling financially for your wedding, home renovations or moving plans, consider taking out a personal loan to help. Not only that, applying for a credit card debt relief or debt settlement loan can help boost your credit score.

Taking a personal loan can also help improve your financial situation. Read more about it here.

Failure to pay on time will negatively affect your credit score, making it harder to get a loan in the future.

While you don’t have to worry about losing your collateral with an unsecured personal loan in Singapore, the consequences of late payments can damage your credit status and financial situation.

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So before you apply for a loan, do everything you can to make sure you can afford it