How to Calculate Interest on Loans
With the steep cost of modern living, taking a loan is an inevitability. Sooner or later you will need to borrow money, if not to send your child to school, to purchase the convenience of a car. If not to buy a vehicle, to make some improvements on your home. While finding someone to borrow from is not a problem, paying back is always a worry. How much more you will be paying back on top of what you borrowed is the main concern. This is why it’s important to be able to calculate interest on loans.
The Importance of Interest on Loans
Knowing the amount of interest you will be paying will help you determine where to borrow from.It will help you find the lender with the best terms. There are a number of ways to calculate interest on loans. If you feel up to it you can calculate interest on loans yourself. This of course means using your principal, rate of interest and the period of repayment to calculate interest on loans, which can be a daunting task for those of us who run at the sight of numbers. The easier way is to use a tool to calculate interest on loans online. Most of them will just need you to key in the amount you want to borrow to calculate interest on loans and monthly repayments.
Interest and Repayments
Once you’re able to calculate interest on loans and determine the size of the repayments you will be required to pay every month you will be in a position to choose the source of your loan. The most common source of loans are commercial banks. Each of these has a host of products that can give you the amount of money you need for your personal project or immediate needs. You can get a personal loan from a bank and these are categorised broadly into secured and unsecured loans. Secured loans will require you to have some form of security against which you can guarantee the loan. This will normally be a motor vehicle logbook or the title deed to some kind of property. An unsecured loan on the other hand does away with the security requirement. But most banks will still need evidence of a steady income before they grant you this kind of loan.
Free Interest Calculation Tools
If you log onto the sites of these banks you will find a free tool to calculate interest on loans and monthly repayments. Nedbank has one which you can find here. The only detail they need is the amount of money you want to borrow and the calculator will work out how much you will need to repay every month. If you think their terms are agreeable you can apply for a loan with them right away online.Nedbank is not the only financial institution of its kind offering South Africans the chance to calculate interest on loans online. Standard Bank also has this option. In fact, they have calculators for the different kinds of loans which they offer.
There are also external sources to help you calculate interest on loans like this one.