Discover how to calculate a loan to know how much you will pay in interest according to the term and the amount of money you choose. Learn how to apply for a payday loan consolidation and get the best lafayette funding bbb offer adapted to your needs quickly and conveniently.
Calculate the cost of your loans in a personalized way
The free calculator developed by the experts of HelpMyCash.com is one of the best online tools we can find to calculate the price of a loan, because it takes into account all aspects that influence the final cost of these products: the interest rate applied, the commissions, the selected reimbursement period.
Furthermore, once the calculations are made, it offers us the cheapest and most advantageous existing alternatives in the current market. To use it we just have to fill in the fields and enter the address of our email.
How does a loan calculator work?
With a loan calculator we can know how much money we will have to pay in total for the loan we hire depending on its amount, its term, the interest applied, the commissions it includes and other factors. In addition, these tools also usually show what is the monthly fee to be paid and what percentage corresponds to each item. We can use several loan calculators depending on the product we request:
- Mini loan simulator: they are small calculators that will allow us to know how much we will pay in total and when we will do it according to the amount of quick money that we choose and the term in which we want to return it. As this type of credit is reimbursed in a single payment consisting of principal plus interest and does not have any additional commission, it is a very simple simulator that all mini-credit platforms include on their websites to help users.
- Personal loans calculator: this type of calculator can be found both on the websites of the lenders, in which case we will only have to indicate the amount and the term or quota because the entity already takes into account the other factors; or as independent comparators. In the second case, this simulator is a little more complex since it includes other fields to be taken into account in addition to the amount and the term to adapt to the characteristics that influence the price of the credit in question. In this case we will have to introduce both the money that we want to request and the term or the monthly payment that we are going to choose. In addition, we will also have to introduce other fields such as commissions, purpose or linked products so that the calculator can give us a simulation as approximate as possible.
Using this tool is very useful to know if a credit is cheap or not according to your total costs at the end of the life of the credit and with the variables of amount of money, term and quotas that we have chosen and not having to compare between different offers, where not all have the same characteristics and, therefore, it is not possible to compare them.
5 factors to take into account to calculate credits
When calculating a loan we must take into account all the factors that influence the total cost of financing that we are going to hire. Knowing all the important features when hiring loans is essential to get the offer that best meets our needs. These are the most important factors when using a loan calculator:
- Amount: it is one of the most important factors, the amount of money that we are going to request and that they will ask us in all the calculators. Without an amount on which to perform the calculations, we will not know how many interests will be generated.
- Interests: both the TIN, which indicates the interest on the loan and the APR, which indicates the total cost of the financing that we are going to request, including both commissions and interest.
- Commissions: depending on the credit you can include them or not. The most common are the opening and study and its cost is between 1% and 3% on the capital that we request. Likewise, not all entities decide to apply these fees.
- Related products: some loans require us to hire certain products in order to access the financing we need. Depending on the type of link can be free, such as direct debit or payroll or a receipt; or with additional costs, such as contracting insurance. Some entities now offer the optional hiring of some products in exchange for a reduction in interest. If the link has no cost, it is a good offer, although if we have to pay for this product, we must calculate which of the two options is the cheapest.
- The term is another of the most influential factors when calculating a loan. The longer the term, the more interest we will pay in total, although the monthly payment will be lower. A good way to calculate the ideal term is that the percentage dedicated to the repayment of the credit that we hire does not exceed 35% of our net income.
Having all this data of the different loans that we want to calculate we will be able to obtain a complete report of how much we will pay in total, what percentage will be in commissions and how high will be the monthly payment of the reimbursement fee. It is essential to compare different loans in order to choose the one that best suits us.
How does the fee affect the calculation of the cost of a loan?
Although not always taken into account, the repayment term of personal loans is one of the factors that most influence the cost of financing. The longer the repayment period, the more interest will accrue, so the more expensive the contracted loan will be. For this reason, it is always advisable to select a rather high fee (always within our economic capacity), as the term will be shorter and, consequently, we will pay less money in interest.
This rule says that in order not to unbalance our economy, we should not allocate more than 35% of our income to the repayment of the credits. So if we charge 1,000 euros per month, the monthly payment we pay should not exceed 350 euros.
Requirements to apply for personal loans
Before calculating how much we will have to pay for a personal loan, it is important that we know the requirements established by the entities so that our profile is suitable. Generally, all companies will require the same requirements, although they may vary depending on their risk policies:
- Be a permanent resident in Spain and have a DNI or NIE
- Be of legal age, although depending on the entity, the minimum age maybe 21 years or 25 years
- Have a regular, sufficient and justifiable income. It does not have to be a payroll, other types of income will also be valid as those of the self-employed or pensioners.
- Not be registered in any file of defaults, especially if we are requesting a loan to a bank. Some private companies do admit persons registered in delinquent files as long as the debt is not related to a bank and the amount we owe does not exceed 500 euros, in some cases even 1,000 euros.
What documents do we need when requesting credits?
When we decide to request financing, the entity we go to will require us to present certain documents in order to verify that we comply with the required requirements. The documents that we will have to send depending on the entity we go to. In the case of banks, if we are already clients, we will not have to present a lot of documentation because they will already have it, but generally, they will ask us for more documentation than private lenders, since their requirements are stricter. However, if this is the first time we go to a bank or a private lender, we will probably be required to present the following documents:
- Identity document: DNI, NIE or passport that certifies our age and that we are permanent residents in Spain.
- Bank statement: with which the entity will analyze our fixed monthly income and expenses.
- Proof of income: it will be necessary to present a document certifying that we are currently working and valuing our salary to know our ability to pay. In some personal loans, a document certifying that we have stable income will be sufficient (pension, unemployment benefit, IRPF).
- Loan application form: it is a document in which we will have to add our personal and economic data.
- Annual VAT summary: this document will only be necessary if we are self-employed.
- The budget for our project: if we request a loan to carry out a project or acquire a specific asset.
In the event that we request the loan from a bank, we will usually have to physically go to the office and perform the procedure in person. On the contrary, if we decide to ask a private equity entity, they will probably allow us to carry out the whole process online, which will save us time and allow us to obtain the money more quickly.