Alternative Payment Frequencies Calculator

Alternative Payment Frequencies Calculator

A loan can be a great financial tool to enhance your life. In fact, you will probably get several over your lifetime. Most people have at least one credit card, an auto loan, and a mortgage. Without a loan, you would need substantial savings for many essential purchases in life. To get the best use of your borrowed funds, it’s important to understand all your loan options. That includes the type of loan to apply for and payment terms that make the most sense.

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Your basic loan options
When it comes to getting a loan , there are two types of loans available to consumers. You can get a loan that is secured or unsecured. Both loans differ concerning their cost and risk.
Secured loan : A secured loan, as the name suggests, is a loan backed by a personal belonging. The asset can be anything with a value relative to the loan amount. For example, you could offer up your home in exchange for a mortgage . Legally the loan issuer can take the collateral if you default on your payments. As the borrower, you accept most of the risk on a secured loan.
Unsecured loan : The other option is to get an unsecured loan. This type of loan is granted on an agreement only. Applicants qualify on income and credit score, without having to pledge a belonging. Credit cards , student loans, and small personal loans are the most common unsecured loans.
If you default on an unsecured loan, the loan issuer could sue you to get their funds back. Lawsuits can be expensive and time-consuming. There is also no guarantee that the creditor will get their money. In this case, the lender assumes more risk in giving out an unsecured loan.
Which loan is best?
Your decision on which loan to apply for will depend on many factors. You should consider the amount you need, what the money is for, and if you meet the lending criteria.
For instance, applicants that have had problems with their credit will have an easier time getting a secured loan than an unsecured loan. Secured loans also tend have lower interest rates and can provide greater access to funds.
Alternatively, if you have strong credit and only need to borrow a small amount, an unsecured loan could be a good choice. As long as you have been able to manage your credit well, you should not have to risk your assets.
Regardless of which you choose, you should always compare your loan offers . Check out the interest rates and terms that other creditors are offering before making a decision.
The terms of your loan
Within the loan options set out (secured or unsecured), you can have some flexibility with the structure of your repayments. You can arrange to meet your obligations using various frequencies and loan maturities . There are some instances where a borrower may benefit from grouping their billing into longer intervals. If your income is irregular or seasonal, you might prefer to pay bi-monthly (every other month) or quarterly (every three months).
The frequency of your loan payments can dictate how long you will have the loan for. If you increase or decrease payments, the loan balance and interest charges will respond to that change. The interest compounding rate will affect the total interest paid on the loan too. When compounding occurs more frequently, like monthly versus yearly, you can end up paying more. Typically, Most loans compound on a monthly basis unless otherwise stated.
That said – there is an important consideration to make when extending your payment frequency. As an example, if you make your payments yearly instead of monthly, you’ll likely accrue a lot more interest. But to balance out the interest, you should reduce the number of payments. Instead of making 60 monthly payments over a span of 5 years, you could make 10 semi-annual payments for the same length of time to manage your interest charges.
Being honest about your repayment abilities is crucial. You can always make extra payments without any penalty, but not making your payments on time can lead to trouble. If you signed up for monthly billing but only pay the issuer quarterly, you could go into default. Defaulting on your loan will damage your credit score and can result in a lawsuit or lost assets.
Accelerated payments
When you make a loan payment every two weeks, instead of monthly, you can reduce your interest charges. Since there are more than four weeks in a month, you end up making some extra payments by the end of the year. Read about the considerations and find out how much you can save with this simple trick.
Where can you get an alt frequency loan?
Most big-name banks will permit payments at alternative frequencies. You could easily sign up for weekly, bi-weekly, semi-monthly, or monthly billing cycles.
When it comes to making payments at longer intervals, your options will be limited. You could probably negotiate an alternative frequency payment with a hard money lender. They may be able to work out a plan that is more flexible then what a traditional lender would offer. This is in part due to the nature of their financing. Since their funds are privately sourced they can better tailor their terms to their clients.
Using the calculator
With this calculator, you can work out the most favorable terms of your loan.
All you have to do is include a few details about your financing to get an accurate report. Let’s review this together.
Step 1 . Before getting started, you have to select what you would like to calculate for. You can either find out how much you can afford to borrow or what your payments will be. The selection can be made next to “calculate”.
Step 2 . If you selected payment, you could add the funds you need to borrow on the first line. If you picked loan amount, you could add a payment that you are comfortable with on the second line. You can use the arrow features or your keyboard to input the information.
Step 3 . Identify an interest rate on line three. The interest rate will depend on the risk associated with your application. Risk factors include your liabilities and credit score, type of loan, loan amount, and where the money is going.
Step 4 . On the next line of the calculator choose how many payments you would like to make, followed by the frequency of your payments. When you opt for fewer payments, you can reduce the amount of interest you are paying. This could be especially helpful if you are making payments that occur less frequently.
Step 5 . View your report in the form of smart summaries, graphs, and tables.
Your results
Beside the calculator inputs, you can see a summary of your loan details. In this section, you can view the loan amount and the total of all your payments after interest. There is even a separate prompt of the interest charges over the life of the loan.
Below the inputs, you can view your primary result. If you were calculating your payment, the system would tell you what your obligation will be, along with the number of payments you selected. If you were trying to figure out how much you can afford to borrow, the calculator would provide you the total loan amount that fits your criteria.
You can view more detailed information within the integrated reports. There is a chart outlining the loan balance, where you can consider the balance payoff. Next, there is a comprehensive table called payment schedule. This grid will provide a breakdown of all the loan payments. Here you can view what portion of your payment is going towards principal and interest.
If you think that you are paying too much interest you can either increase the frequency of your payments or reduce the number of payments you will make. By engaging both variables, you should be able to come up with the terms of your loan that will be best. You can use this information to negotiate your next loan agreement so that it’s your best benefit.
Remember to bookmark this calculator and save it to the home screen of your smartphone. You can return as you get offers from different lenders. If you found this page useful, you can promote us on social media by using the share feature. By passing on this information, you can encourage smarter consumer behavior when it comes to taking out any type of loan.