Loan Calculator


Here I have brought to you all the information you need to know about a loan calculator to get better loan offers.

It is normal for a person with no loan history to fear entering the loan system. You might not be familiar with many technicalities when it comes to taking and repaying a loan. You might even regret borrowing later. It's foolish to risk your income by borrowing money with high loan rates when you can have it at a much lower rate. This for sure requires proper knowledge and basic know-how about what kind of loan procedures are there, how much interest rate is good for the loan amount that you need to borrow, and how convenient the repayment plan is. Don't know the answer to these questions?

If you are not good with calculations and technicalities of the loan-taking procedure, then you can benefit from the online loan calculator to let you know about what will be the interest rate, how much monthly payment you have to make, and how much time it will take for you to pay the whole amount of the loan along with interest. There are numerous calculators and many different types of loans depending upon the nature of the borrower, repayment plan, and the aim of buying money. Here I have brought to you all of the details that will help you get the best repayment plan and loan offer.


A loan simply is the procedure to borrow money from someone with the expectation to return the original sum back with or without any interest. But it is a much informal approach to the loaning procedure. If you are focused on the legal and formal loan-taking system, then things are much more difficult, effort-requiring, and demanding. Taking a loan from your friend and that from the bank are poles apart.

The loan is more like an agreement that is in well-documented form. This settlement is made between people who want to borrow money and the lender who is offering the loan plan. It not only includes the original amount that has been borrowed but also includes the interest ratio that has been decided before making the loan contract. The borrower needs to return the amount that he has taken within the time duration and according to the repaying procedure that has been set while signing the contract.

Loan Calculator

What Is It?

Loan calculators can be really cooperative for newbie borrowers. Just stepping out and looking for loan offers in the market is not a good idea as you may encounter many scams. Loan calculators are tools that will give you a rough sketch of how much money you will have to repay each month or year. You can make a better decision that might save you from risking your future with the help of loan calculators. Furthermore, you may need other calculators so convertzen has arranged a variety of web tools to add value to the calculations of anything in just seconds. Some of the most famous and most tools used we have is the PayPal fee calculator.

You will be more confident while going into organizations to take loans if you know the statistics before. The chances to get fooled by scammers become less and you can even get to know which interest rate is best in comparison to your monthly income or bank balance. You will have to put the values that the calculator requires and you will get to know the repayment amount that you have to pay for your loan money each month or in a year.

Terminologies To Learn Before Engaging In The Loan System

Most laymen might not know the terms that are used by lending agencies. This lack of information might cost you a lot as only a few loan lending institutes make you aware of them before finalizing your loan agreement. You should know a few basic terminologies in time rather than complaining later. Don't worry, these terms are not very vast and complex. Here I have listed a few of them to help you with proceeding to take out a loan.

  1. The loan amount is not the overall amount that you have to repay. Many new borrowers confuse it with the repayment amount. In reality, the word loan amount is the total amount of money that you as a borrower require despite its interest rate or fees.
  2. The term of a loan is the duration and time limit within which the borrower promises to pay back the loan amount along with the interest to the lender. You should look for loans with low-interest rates and short loan terms if your loan-to-income ratio is less. If your monthly income cannot bear the load of a twelve-month plan then you will, unfortunately, have to go for the long-term options, but keep in mind that you will be spying more because of the interest on the loan amount.
  3. The interest rate is an additional amount of money that you are destined to pay apart from your loan amount. You might have wondered why banks, finance agencies, or government lend you money. What is in it for them? The interest rate is the answer to your questions. It is the extra amount paid to blenders by borrowers which is their profit for investing their money by giving you a loan.
  4. Annual Pricing Rate or APR is often confused with interest rate but both are dissimilar. The interest is only the extra amount that is taken as profit value. Whereas the APR also includes loan fees, repayment fees, and other amounts of money that you need to give the lender.
  5. Principal at any point of the repayment plan is the amount of money from the loan amount that you have still got to pay back to the lender. As it is concerned only with the loan amount so it doesn't include the interest rate, fees, or APR.
  6. 6. Maturity of a loan means that the loan is paid successfully. It is the date that acts as a limit for you before which the lender had agreed to pay the loan amount.

Prior Planning For Taking Loan

Before you find out the details about the amount that you need to borrow and how much money you would have to pay in form of the interest on it, you should first make a plan. Planning plays an important role especially when it comes to such issues related to your hard-earned money. If you have thoroughly sorted everything out then you would not be as fearful as compared to when you have no prior clarity of events.

1. The Reason Behind Borrowing A Loan

The first thing that you must be clear of is what is the main causal factor behind your decision to take a loan. Whether it is for something related to investment, buying an auto vehicle or property, education, or health. Once you know that reason then there is more clarity for the individual to understand which type of loan you need to take or what is the total amount you need to borrow. So, if it is clear then you will know what are the current prices in the market and how much amount you will need to borrow. With the help of the fixed total loan amount, you can decide which type of plan you need.

2. Which Organization To Go

Once you have decided to borrow a loan then next you should decide which institute you prefer. It mostly depends on the reason behind taking the loan in the first place that you have decided priorly. If you are looking for a loan for buying a car or house you have several options such as the usual commercial banks, finance companies, government agencies, credit unions, lenders online, and many others. It is best to stick with the authentic procedure as it is more documented and follows legal methods. Many government agencies provide easy-to-repay loan offers for education and housing.

3. Identify the Monthly APR

You would be surprised to find out that apart from the loan amount and interest there can be other fees that you have to pay too. However, the monthly APR is something many newbies are not aware of. In simple words, it is the total sum of the numerous different fees that you have to pay in a year. It includes the interest rate too but it's not the only thing. You would either have to pay this total sum collectively in a year or can also give a small portion of it every month. Once you know the APR rate then you can compare the different offers. Keep in mind that APR must be less than 13% to 14%.

4. Select The Best Loan Offer

The best loan offer is obviously the one that is easy to repay. The loan-taking procedure as well as the repaying method can take very long. So you should be really practical in your approach to borrowing money. Be patient and do a little research. If you have planned from which organization you will borrow the money, then you should step out and visit them to get the know-how of the offers they are providing for your circumstances. The ones with low-interest rates and monthly repayment plans are best. You will know how much load you have to bear monthly in terms of the loan.

5. Guarantee For Secured Loan

Risking your property might seem to be a ridiculous plan, but it can be necessary sometimes. Especially if keeping your property as collateral can help you with getting a low-interest rate. If you use your car as collateral for your home, you will surely have to pay less each month. If your monthly repayment plan is low as compared to your income, which you can calculate by loan to income ratio, then it is good to take the risk. Don't want to risk your property? Go for unsecured loan options.

6. Get Prequalified

After you made your final decision, you will know what to do with it. You should also know the loan offers in the market, which organization you would prefer as a lending source, monthly repayment plan, apr amount, secured or unsecured loan plan, and what to put up as collateral. It is time to go to the organization again before borrowing money. As you are still not guaranteed that you will be given a loan or not, the lender will examine you as a borrower. This examination depends upon how financially independent you are. If you already have a poor loan history things will be tough.

Types Of Loan

Types Of Loan On Basis Of Collateral

As mentioned before the collateral is anything that is in your possession that you have to give temporarily in the ownership of the lender until your loan is matured. If you are really in need of a loan and are failing to be qualified for getting the amount of loan that you need, then instead of merely relying on your income to loan ratio, you should just put up your property, vehicle, or other possessions as collateral. On the basis of the collateral, you will have two main categorizations of loan out of all the numerous types.

  1. Unsecured loan does not include the transfer of collateral. It is good for individuals who can easily be proved eligible for being a borrower without putting their property in danger. This type of loan on one hand is a good choice in terms of repayment as even if you seem to have a default, you will not be losing your possession. In case of default, you might have to give additional fees.

But once you have successfully paid the whole amount of your loan amount including APR, you will get back the ownership of your property from the bank or lender, if not you will simply have to give up on the collateral as a penalty. The most important thing about getting an unsecured loan is that you will surely have to be eligible financially to get and pay back the loan taken from the lender along with the additional charges.

  1. Secured loan gives no security to the borrower. It is the other way round as many lenders can put their investment at risk by giving people loans who don't have the financial assurance of paying back the loan amount in time along with the interest. Surely the secured loan with collateral increases the risk of losing your possession in case of any unexpected delay or default.

But the secured loan is only given when the borrower has some property or valuable asset in their possession and gives its deed to the lending agency, organization, or government. If the loan is not paid or if after three warnings of delaying the monthly amount the lender will have the right to seal and sell the property to get the amount of debt you have to pay. So you must think before getting into a secured loan agreement.

Types Of Loan On Basis Of Payment Plan And Span

1. Deferred Payment Loan

Even though amortized loans are more popular and convenient for many borrowers, many people are in favor of deferred payment loans. These loans have a simple plan and repayment span. If you don't want to fret about the installment amount each month, then this type of loan is best for you. The borrower doesn't have to divide the loan amount over a period of time. Rather they have to pay the full amount of the loan, fees, interest, and APR, all at a time when the time limit has been fulfilled.

2. Amortized Loan

An amortized loan is not claimed to be returned as one single total payment within a certain time duration. Rather it is a better way of repaying debt as you can divide the total loan amount, as well as the interest, fees, and APR value, in such a way that you will be bound to pay a certain portion of your loan every month. You keep on paying these installments until your total amount has been paid back to the lender along with the additional charges. Your loan will mature and your debt will be paid. You might have heard of some of the common categories of amortized loans which are as follows.

  • A personal loan is a type of amortized loan that is lenient in terms of legal procedure, documentation, and the cause of taking the loan. You don't have to go through a very strict procedure to be eligible, but you still have to fulfill the basic requirements as personal loans don't claim any collateral in return for the loan amount governed by the lender. You can repay the loan amount in the form of installments.
  • An auto loan is a loan that the borrower needs to buy a car. For it to be an auto loan the main purpose of taking a loan has to be to get a dream car for yourself. Being an amortized loan you will have to get a plan with an installment procedure along a certain time. As buying cars need a large investment, the lender needs some security and collateral to be on the safer side.
  • Student loans help them with bearing the expense of their education without compromising on their future. Many government organizations as well as private ones offer loans for students to support their education. This amount needs to be repaid but usually has a long installment plan with a low-interest rate.
  • Mortgages are good for people who want to buy more properties even if they doubt the large sum of investment required for it. If you own a property and are eligible for the loan according to your income to loan ratio, then you can put up your property as collateral and get a loan from the lender with interest. The main thing is that you can only use the loan money for buying property only.
3. Bond

Bonds do work if you need a large investment but don't have the money for it. It is a little different and time-consuming as compared to the other types of loans discussed before. You will simply have to buy a bond. The bonds put you in an agreement with the lending organization which is usually a government or a private organization. The organization will sell the bonds.

The selling of the bonds will be in such a way that their price will be increased as compared to what amount the borrower had paid when buying the bond. The profit that the organization has will have a certain amount of share for the borrower. A single bond does not need to sell once as the amount along with profit will be acting as another bond that will again be sold to investors. This cycle will continue until the time limit you have decided, and agreed upon is finished, and your bond has matured.


How do I calculate payments on a loan?

You can simply check what interest rates are the institutes that you have selected to lend you money offering. Then you can simply enter the amount of the loan that you need to borrow, the interest rate, and the lounge term with which you are comfortable in the online loan calculators. The calculator will calculate the amount that you have to take out of your monthly expense each month and year in order to repay your loan successfully.


A loan calculator is best for newbie borrowers who are thinking of taking a loan but have prior knowledge, information, and idea about the market rates, loan offers, types of loans, or the criteria. You don't have to go to numerous organizations to find out what amount of interest, APR value, loan term, and how much installment amount you have to pay monthly. A loan calculator will do it for you. I hope that with the help of a loan calculator, knowledge about basic terminologies, prior planning, and know-how about the different types of loans you will get the best loan offer.