Loan Comparison Calculator

In order to figure out which loan is the most suitable option for you, you need to do more than just compare the associated payments and interest rates. You can take help from this calculator and compare loans on the basis of other factors, such as the fees and so on. Comparison is done on a one to one basis for each factor, so you can easily make a good decision. The generated report gives you a further detailed analysis.

Loan Comparison Calculator

Loan Amount

This is the total amount which you have borrowed.

Interest Rate

This is the rate at which interest is incurred on the loan.

Term

This is the total time period in years in which you a have to pay off the loan. Generally, a term lasts for around 15 or 30 years. If you avail the balloon payment option, then the length will be less than the time period required for loan amortization. As an example, if there is a loan with a term of 5 years, and is amortized over 20 years, then you will have to pay the same amount every month as you would be doing in the case of a 20 year loan. The interest rate will also be the same. The difference between these two options is the fact that for the 20 year loan, all the monthly payments will be equal throughout the term. For the 5 year loan, the payments will still be equal, but at the end of the period, you will have to make a huge balloon payment in order to pay off the remaining amount.

Amortization

This is the time period in years which is used for estimating the monthly payments. If you choose to get your loan amortized for a longer time period, you will have to pay a huge balloon payment. See ‘Term’ for more details.

Brokerage Fee

This is the amount in dollars which your broker would charge you. A fee of 1% is fairly common. For instance, if you borrow $120,000 as loan and the fees is 1%, it means you would be paying $1200.

Establishment Fee

This is an upfront amount which is used for calculating APR.

Other Charges

These are any other fess which your lender may charge you. There is a lot of variation for this parameter, but usually prepaid interest is included.

Other Expenses

These are all the extra costs associated with the loan. They are included in APR calculation.

Monthly Loan Payment

This is the sum of the principal amount and the interest payment.

Annual Percentage Rate

Annual percentage rate or APR is a standard amount calculated by each lender. This parameter helps you compare loans on the basis of several options, such as rates, fees and terms. For instance, a loan being offered at a low interest rate might not be that great a choice if there are a lot of fees to be paid. Similarly, if the rate is high but the fees are not, then also the loan may not be feasible.

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Blog June 4, 2013 admin No Comment(s)

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