When you negotiate a loan, one of the most important criteria to focus on is the level of interest rates and fees, or how much the loan is expensive. When dealing with internet loans, we can encounter a credit calculator for the vast majority of loans, whether from the banking or non-banking sector.
How does the interest calculator work?
Interest calculators are usually a simple tool to help you set the exact parameters of your loan – specifically its amount and repayment period. Based on this information, the loan calculator will clearly show you a number of other important information – the interest rate, APR (annual percentage rate of charge), monthly installment amount or the total amount you pay for the loan.
Bank loan interest rate calculator
Loan calculators for individual banks are usually very similar and those interested in a loan will set the amount they want to borrow and the period for which they will repay the loan (or the amount they are willing to pay monthly). But it should be emphasized that the calculation is usually only indicative and the resulting numbers may eventually vary slightly – so take the credit calculator with caution.
Interest calculator for non-bank loans
For non-bank loans, interest calculators are virtually commonplace, usually on the home page of their website. It serves primarily to set the parameters of the loan, thanks to them, the candidate can easily choose the required loan amount, eventually maturity and immediately learn how much the loan will cost. It is offered by the vast majority of leading non-bank providers on its site.
Mortgage interest rate calculator
In the case of mortgage loans, the calculation of costs is a bit more complicated because more parameters play a role – for example, interest rate fixation times. Mortgages generally require more paperwork and often require a personal visit to a financial institution’s branch. In addition to the websites of the mortgage providers themselves, various specialized portals are also a useful help to help you choose the ideal mortgage – just enter the necessary data. But mortgage specialists or other financial advisors can help.
Difference between interest rate and APR
In addition to the monthly repayment amount and the total amount to be repaid, there are also two important figures for credit calculators – the annual interest rate and the APR. But both numbers have a different meaning – what is the difference between them?
While the annual interest rate shows only the amount of interest and therefore does not include the total cost of the loan, the APR (annual percentage rate of charge) already includes other costs, such as different fees, etc. RPSN is a better indicator, because together With fees, the loan can then become more expensive. On the other hand, it must be said that the APRC is by definition a key indicator for long-term loans. In the case of short-term loans – typically, for example, SMS loans with a maturity of about one month – the APR is usually very high and it is therefore necessary to look at the total amount payable, which will give us a better picture of the loan’s advantage.
What do you want to pay attention to the interest calculator?
For a lot of loans, some information is only in small print and can be easily overlooked – always read the entire web carefully so that you are not unpleasantly surprised and signed an unnecessarily unfavorable credit agreement. Pay attention – especially for small loans for a short period of time – what are the penalties for non-repayment or how much would you potentially extend the loan maturity. In fact, a loan that may seem advantageous at first may cost you much more than you could imagine.