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Our Personal Loan Calculator tool helps you see what your monthly payments and total costs will look like over the lifetime of the loan. We calculate the monthly payment, taking into account the loan amount, interest rate and loan term. The pay-down or amortization of the loans over time is calculated by deducting the amount of principal from each of your monthly payments from your loan balance. Over time the principal portion of the monthly payment reduces the loan balance, resulting in a $0 balance at the end of the loan term.
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Personal Loan Calculator
Personal loans can be your ticket to paying off high-interest credit card debt or tackling big bills. But like all debt, personal loans are not to be taken lightly. Once you've figured out how much you need to borrow and how much you can afford to pay back each month, you can start shopping for personal loans. Personal loan calculators help you know what to expect.
Wondering if a personal loan is right for you? It’s important to ask yourself why you want to borrow money. Is it to pay off bills or move to a city with more job opportunities? Is it to eliminate high-interest credit card debt? All of these are scenarios where it might make sense to consider an affordable personal loan.
What do we mean by affordable? True affordability is a factor of both the personal loan interest rate and the personal loan payments over time. Even a loan with a low interest rate could leave you with monthly payments that are higher than you can afford. Some personal loans come with variable interest rates that can increase after a period of time. These loans are riskier than those with fixed interest rates. If you are looking at variable interest rate loans it's a good idea to ensure that you will be able to afford it even if the interest rate reaches the highest point possible in terms.
Start With the Interest Rate
The higher your credit score, the lower the interest rate you will likely qualify for on a personal loan. If you think you might be in the market for a personal loan in the future, it’s a good idea to get to work building up your credit score. Contest any errors in your credit report, pay your bills on time and keep your credit utilization ratio below 30%.
Once you're ready to shop for a personal loan, don't just look at one source. Compare the rates you can get from credit unions, traditional banks, online-only lenders and peer-to-peer lending sites.
When you've found the best interest rates, take a look at the other terms of the loans on offer. For example, it’s generally a good idea to steer clear of installment loans that come with pricey credit life and credit disability insurance policies. These policies should be voluntary but employees of lending companies often pitch them as mandatory for anyone who wants a loan. Some applicants will be told they can simply roll the cost of the insurance policies into their personal loan, financing the add-ons with borrowed money.
This makes these already high-interest loans even more expensive because it raises the effective interest rate of the loan. A small short-term loan is not worth getting into long-term debt that you can't pay off.
Look out for fees and penalties that make it harder for borrowers to pay off their personal loans. An example: Prepayment penalties that charge you for making extra payments on your loan. Read loan terms carefully and check for language that explicitly states the loan doesn't carry prepayment penalties.
Stay away from loans that come with exit fees, a fee some lenders charge you after you pay off your loan. You shouldn't have to pay an exit fee, or work with a lender who wants to penalize you for personal loan repayment.
Consider Alternatives Before Signing Your Name
There are alternatives to commercial personal loans that are worth considering before taking on this kind of debt. If possible, borrow money from a friend or relative who is willing to issue a short-term loan at zero or low interest. Alternatively, if you have high-interest credit card debt that you want to eliminate you may be able to perform a credit card balance transfer.
What's a balance transfer, you ask? Some credit cards offer a 0% APR on new purchases and on your old, transferred balance for a year. If you can get one of these deals and manage to pay off your balance while you have the introductory interest rate you may be better off opting for a balance transfer than for a personal loan. It's important to pay off your balance before your APR jumps from the introductory rate to a new, higher rate.
Loan calculators can help you figure out whether a personal loan is the best fit for your needs. For example, a calculator can help you figure out whether you're better off with a lower-interest rate over a lengthy term or a higher interest rate over a shorter term. You should be able to see your monthly payments with different loan interest rates, amounts and terms. Then, you can decide on a monthly payment size that fits into your budget.
All debt carries some risk. If you decide to shop for a personal loan, hold out for the best deal you can get. Sure, payday loans and installment loans offer quick fixes, but these loans can quickly spiral out of control. Even those with bad credit can often get a better deal by searching for a loan from a peer-to-peer site than they can from a predatory lender. See for yourself by researching your options with a personal loan calculator.
Cities with the Most Debt Savvy Residents
SmartAsset’s interactive map highlights the places in the country where people are the most debt savvy. Zoom between states and the national map to see where people are smartest when it comes to debt.
Methodology Our study aims to find the places where people are the smartest when it comes to debt. To find these debt savvy places we looked at four factors: credit score, average personal loan debt, credit utilization and mortgage foreclosure rate.
To calculate the Debt Savvy Index, we weighted all four factors equally. We ranked the cities on each of the categories and then indexed each category. We then added those indices together and indexed that. A debt savvy location means people there have high credit scores, low average personal loan debt, low credit utilization and low mortgage foreclosure rates.
Sources: Experian, HUD