If you’re considering applying for a personal loan, an online personal loan calculator can help you determine how much money you can borrow and how much the repayments will be. The Yes Loans personal loan calculator can help you understand how much interest you’ll pay and the loan duration. It gives you an accurate idea of your responsibilities.
People apply for loans for many reasons. You might need extra money for a home renovation, a trip overseas, a car loan, or to pay off a credit card. A personal loan is a good way of accessing extra cash, but before you hit the apply button, you need to understand how a personal loan works. A loan calculator is an excellent way to find the right offer and start planning your finances.
What is a loan?
A loan refers to an amount of money a person or business borrows from an organization (banks, credit unions, or financial institutions).
There are two parties involved in a loan:
- Borrower: the individual or entity borrowing money
- Lender: the institution lending the money
The borrower must repay the loan and the accrued interest within a specified period. You can use a personal loan for any purpose you see fit if you can repay the loan as per the loan agreement.
What is a personal loan calculator?
A personal loan calculator is a tool that helps you determine what the expected personal loan payments will be. Adjust the information you enter in the calculator to see how much you can afford to borrow. A loan calculator can also provide you with information about the following:
- the effect different interest rates can have on your repayments
- the interest amount you will pay over the loan’s term
- the total cost of borrowing the loan.
How do you use the Yes Loans online personal loan calculator?
- Enter the loan amount
- Enter the term of the loan
- Enter the interest rate
- Select your payment frequency
Once you’ve entered the data, the loan calculator will show you how much your payments will be.
How do loans work?
When your loan gets approved, you sign a legal agreement that creates a legal obligation to repay the loan and interest within the time specified by the lender. The lender also decides:
- the interest chargeable on the loan
- the payment frequency
- the consequences of non-payment or delayed repayment
These are all specified in your loan agreement. If you are borrowing a secured loan, the contract specifies what happens to the secured asset if you fail to repay the loan as per the agreed terms.
Factors to consider in loan repayment
Some critical factors to consider when contemplating applying for a loan:
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Your repayment ability
Before signing up for a loan, use a repayments calculator to determine how much you need to pay. Only apply if you can pay the requisite amount every week or month.
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Nature of the loan (secured or unsecured)
Remember that unsecured loans are more expensive than secured loans.
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Extra repayments
Check whether the lending terms permit extra repayments. Ideally, you should be able to make extra repayments without penalty.
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Hidden charges
Make sure there aren’t any hidden fees or costs associated with the personal loan.
Different loan types
Typically, loans are classified into two main types: secured and unsecured loans.
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Secured loans
Those loans require collateral. These can include car or home loans, where the car or home provides security. Sometimes, you can also offer your personal property to borrow the funds. Using collateral reduces the lending risk, resulting in lower interest rates. The loan amount can also increase with a secured loan.
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Unsecured loans
These do not require any collateral. Examples include small personal loans and credit cards. The interest rate of unsecured loans tends to be higher as there is nothing to minimise the lending risk.
Personal loans are usually unsecured loans. Car loans are typically secured loans, where the car itself acts as collateral for the loan.
What interest rate do I pay on loans?
The interest you pay can depend on the loan type and other factors like income, age, credit history, credit score, repayment track record, and banking relationship.
When should I get a loan?
Borrowing a loan is a good option if you need a sizable amount of money but do not have any other means to access the funds. Loans can help you tide over various financial emergencies or expenses, including purchasing a car, planning a home renovation, or taking a trip overseas. As long as you can repay the money, a personal loan will likely be approved.
Choose Yes Loans for your fast online Personal Loan
Talk to Yes Loans to learn more about our fast, efficient personal and car loan options. The sooner you apply, the sooner you’ll have the money! Our personalised loans come with a range of options and loan protection insurance. Once you have used the loan calculator, contact one of our personalised loan experts or apply directly for fast, efficient pre-approval.
Check out how Yes Loans can provide you with the financial loan you require, so we can help get you money fast. Call us today.