It is often a good idea to use a calculator to know in detail what it takes to obtain a personal loan. It becomes necessary to use such kinds of tool when you are offered with a variety of options from one or many lenders. Choosing a right financing option is important to maintain your creditworthiness. You can’t afford to miss a payment or default on a loan, resulting into a big blot on your credit report. You won’t be able to obtain an unsecured loan at an affordable rate if your credit score begins to take a U-turn. Use a personal loan payment calculator and take the right financial decision.
Almost all major lenders provide calculators and a number of other tools to help you shop for the best product. Depending upon your need, there can be a wide spectrum of personal loan calculators, such as one with amortization schedule and the other with down payment. Some of the biggest banks offering personal financing products with easy monthly payments and affordable interest rates include Bank of America, Wells Fargo, PNC Bank, Chase Bank, Capitol One, Citibank, US and BB&T.
A personal loan payment calculator is a simple tool that helps you know about your monthly payments based on loan amount, interest rate and loan term in years or months. Sometimes a calculator must also consider things like down payment, biweekly payments and extra payment. The calculator based on credit score can help you find the lender willing to offer you a personal loan at a desirable rate. Similarly, there also exists interest only payment calculator.
How to Calculate Personal Loan Payments
There can be several ways to calculate your monthly payments
- Calculate manually by directly applying the formula: Since interests are compounded monthly, we need to divide the rate of interest by 100 and then by 12 before it can be used in the formula. The loan term should also be converted into months. Here is the formula to calculate monthly payment:
Monthly Payment = (Principal Amount * Monthly Interest) / (1 – (1 + Monthly Interest) ^ – Number of months)
- Take the help of an Excel Sheet or any other spreadsheet program: Excel offers a built-in formula to calculate personal loan payments. Create four headings – interest rate, loan amount, loan term and monthly payment – in a spreadsheet. Under each heading, enter the value. Remember to divide interest rate by 100 and 12. For example, the 6 percent annual percentage rate will become a monthly interest rate of 0.005. Similarly, a 5 year loan term will result into 60 months. The formula to calculate payments in an excel sheet is PMT(Rate, Months, Amount).
- Use a personal loan payment calculator online: Avoid all hassles of calculating manually or using a spreadsheet. Just use the online payment calculator present at our website personalloanshub.com and calculate your monthly payment in just a few seconds. You can search online to find many other similar calculators and even those with amortization tables, graphs and other visual outputs.