Finance Choices
Loan Calculator
You can use a loan calculator to figure out loan payments and fees, but you can also use multiple quotes to ensure that you are getting a good deal. We encourage consumers to get multiple quotes (4 is a good number) for their loan and then use either a loan calculator or basic math to figure out what the best deal for you will be. It?s pretty easy and it?s all about shopping around for the best deal. There are different types of loans and you should also inquire about that, in order to get what you want.
Any loan where the lender pays all of your closing costs (title & escrow fees, appraisal, lender's fees, etc.- any non-recurring expenses), is commonly referred to as a "no-cost" loan. A true "no-closing cost" loan differs from both a "no lender fee" loan or a loan in which the lender adds the closing costs to the amount financed. A "no lender fee" loan, sometimes advertised by banks, usually will not cover the title, escrow, and other outside charges you may need to complete the refinance.
With a true "no-closing cost" loan, you can refinance for any incremental drop in your interest rate since the transaction costs are zero. Even in a declining rate market, where you believe rates may continue to fall, a no-cost loan will make sense. Should rates continue to decrease you will have invested nothing in the loan costs, and can simply refinance at any time. Some borrowers refinance every year or less!
There are a variety of interest rate and point combinations available to the borrower at any point in time for the same product or loan type. As an example, for a loan amount of £200,000 a borrower can be quoted 6.75% with .875% points, 7.0% with zero points, or 7.25% with no closing costs. All three of these quotes are for a 30 year fixed rate mortgage. The lender allows the borrower to choose amongst rate and point combinations since some people prefer a lower rate immediately, while others prefer minimizing how much they pay out of pocket up front. Thus, the borrower can select the combination which feels most comfortable to their personal situation. For some borrowers, the no closing cost option of 7.25%, while providing a slightly higher rate, still requires the least investment up front and therefore is the best option.
No cost loans will always carry a slightly higher rate than a loan that does not pay your costs. In general, a no cost loan is the better strategy if you plan to keep your loan for the next two and a half to three years. Longer than that, you should consider paying the costs yourself to get a lower rate. Over time, the lower rate will save you more money. And if you plan to keep the loan for four to five years, it often makes sense to pay points to get an even lower rate.
You can use the Finance Choices loan calculator application here, or alternatively you can read our easy to understand reviews of the latest loans on the market here.
Using the Loan Calculator is pretty simple. Enter the data asked for on the screen (Principal Amount, Interest Rate, Payment Period, Term/Length Of Loan, Payment Amount, optional First Payment Date). Press CALCULATE to calculate the loan (or RESET to clear all the entry fields on the screen and re-enter data). When CALCULATE is pressed, the loan calculator will build a new screen (web page) with your loan data included. You can print this information to a printer using the print command on your browser (assuming you know how to print from your browser). Below is a summary of the fields (data) to be entered. This summary will hopefully answer any questions you may have.
PURCHASE PRICE - Enter the sale amount of the item you are financing.
DOWN PAYMENT - Enter the amount (if any) you are putting down on the purchase.
SALES TAX - Enter the percentage (if any) of sales tax applicable to this purchase. Enter 5% as 5
YEARLY INTEREST RATE - Enter the yearly interest rate (APR) for the loan. Enter 10.5% as 10.5. To have the interest rate of a loan figured by the calculator, leave this field blank, enter a PAYMENT AMOUNT and any TERM (LENGTH OF LOAN) except for Calculate Term (see PAYMENT AMOUNT and TERM below).
PAYMENT PERIOD - Choose one of eight (8) options. Monthly will calculate the loan for a payment period (number of days between each payment) of 30 days. Annually - 360 days. Quarterly - 90 days. Semi-Monthly - 15 days. Bi-Weekly - 14 days. Weekly - 7 days. If you choose the option Other, you will be prompted after pressing CALCULATE to enter the payment period in days. The Other option is included to allow you to enter a payment period (example: 6 days) other than monthly, bi-weekly, or weekly, ect. If the Other option for PAYMENT PERIOD is choosen, TERM (LENGTH OF LOAN) must be set to Other or it must be set to Calculate Term. The Mortgage Bi-Weekly option will calculate a monthly payment, divide it by 2, and then it will apply this payment amount bi-weekly (payment every 14 days/average of 26 payments a year). This should result in an average of two (2) extra payments a year, which should pay off the loan faster and with less interest than a conventional mortgage or loan. Please Note: To correctly estimate how mortgage bi-weekly payments can pay off a conventional mortgage loan faster and with less interest, the TERM (LENGTH OF LOAN) must be set to the length of a conventional mortgage loan (usually 15 or 30 years). If you enter a PAYMENT AMOUNT coupled with the Mortgage Bi-Weekly PAYMENT PERIOD, the calculator will assume this payment amount is a monthly payment amount and it will calculate the mortgage bi-weekly payments accordingly. The Mortgage Bi-Weekly option may be disabled by the web site owner. If so, you will probably see the option N/A - for not available.
TERM (LENGTH OF LOAN) - Choose one of several options for the length (term or number of payments) of the loan. If you don't find an option that fits your loan, chose Other. The Other option will prompt you to input the length of the loan (number of payments) when you press CALCULATE. The Calculate Term option allows you to enter a payment amount in the PAYMENT AMOUNT field and the calculator will figure the term. See below for more details.
PAYMENT AMOUNT - This field should be set to 0 if you would like the loan calculator to figure the payment amount for each pay period. However, the PAYMENT AMOUNT field is provided so that if you know the payment amount of each loan payment, you can enter it here and the loan calculator will use this payment as the basis of its other loan calculations (such as calculating the term). This feature is useful if you have a loan and you would like to see the amortization and/or payment dates for that loan. If you do enter a payment amount, you must set TERM (LENGTH OF LOAN) to Calculate Term or you must leave INTEREST RATE blank.
FIRST PAYMENT DATE - Enter a date here if you wish the loan calculator to date each payment. Entering this field is optional. This field is only used if CALCULATE DETAILED PAYMENT AMORTIZATION is set to YES.
IS THIS A MORTGAGE LOAN? - CHECK THIS if you wish to calculate the loan estimate as a mortgage loan. Calculating the loan estimate as a mortgage loan will figure estimates for taxes and insurance and add these estimates to your payment. Checking this option will also display estimated closing costs according to points. This option has no effect if the PAYMENT AMOUNT field is other than 0. UNCHECKED is the default.
CALCULATE DETAILED PAYMENT AMORTIZATION - CHECKING this option will cause the calculator to display each payment (with a payment date if you entered FIRST PAYMENT DATE), along with displaying the interest accrued during the period, amount applied, and the new balance. UNCHECKED is the default. Be aware that the calculation and display of each payment can considerably slow or disrupt display of the results in some browsers.
Any loan where the lender pays all of your closing costs (title & escrow fees, appraisal, lender's fees, etc.- any non-recurring expenses), is commonly referred to as a "no-cost" loan. A true "no-closing cost" loan differs from both a "no lender fee" loan or a loan in which the lender adds the closing costs to the amount financed. A "no lender fee" loan, sometimes advertised by banks, usually will not cover the title, escrow, and other outside charges you may need to complete the refinance.
With a true "no-closing cost" loan, you can refinance for any incremental drop in your interest rate since the transaction costs are zero. Even in a declining rate market, where you believe rates may continue to fall, a no-cost loan will make sense. Should rates continue to decrease you will have invested nothing in the loan costs, and can simply refinance at any time. Some borrowers refinance every year or less!
There are a variety of interest rate and point combinations available to the borrower at any point in time for the same product or loan type. As an example, for a loan amount of £200,000 a borrower can be quoted 6.75% with .875% points, 7.0% with zero points, or 7.25% with no closing costs. All three of these quotes are for a 30 year fixed rate mortgage. The lender allows the borrower to choose amongst rate and point combinations since some people prefer a lower rate immediately, while others prefer minimizing how much they pay out of pocket up front. Thus, the borrower can select the combination which feels most comfortable to their personal situation. For some borrowers, the no closing cost option of 7.25%, while providing a slightly higher rate, still requires the least investment up front and therefore is the best option.
No cost loans will always carry a slightly higher rate than a loan that does not pay your costs. In general, a no cost loan is the better strategy if you plan to keep your loan for the next two and a half to three years. Longer than that, you should consider paying the costs yourself to get a lower rate. Over time, the lower rate will save you more money. And if you plan to keep the loan for four to five years, it often makes sense to pay points to get an even lower rate.
You can use the Finance Choices loan calculator application here, or alternatively you can read our easy to understand reviews of the latest loans on the market here.
Instructions for using the Loan Calculator:
Using the Loan Calculator is pretty simple. Enter the data asked for on the screen (Principal Amount, Interest Rate, Payment Period, Term/Length Of Loan, Payment Amount, optional First Payment Date). Press CALCULATE to calculate the loan (or RESET to clear all the entry fields on the screen and re-enter data). When CALCULATE is pressed, the loan calculator will build a new screen (web page) with your loan data included. You can print this information to a printer using the print command on your browser (assuming you know how to print from your browser). Below is a summary of the fields (data) to be entered. This summary will hopefully answer any questions you may have.
PURCHASE PRICE - Enter the sale amount of the item you are financing.
DOWN PAYMENT - Enter the amount (if any) you are putting down on the purchase.
SALES TAX - Enter the percentage (if any) of sales tax applicable to this purchase. Enter 5% as 5
YEARLY INTEREST RATE - Enter the yearly interest rate (APR) for the loan. Enter 10.5% as 10.5. To have the interest rate of a loan figured by the calculator, leave this field blank, enter a PAYMENT AMOUNT and any TERM (LENGTH OF LOAN) except for Calculate Term (see PAYMENT AMOUNT and TERM below).
PAYMENT PERIOD - Choose one of eight (8) options. Monthly will calculate the loan for a payment period (number of days between each payment) of 30 days. Annually - 360 days. Quarterly - 90 days. Semi-Monthly - 15 days. Bi-Weekly - 14 days. Weekly - 7 days. If you choose the option Other, you will be prompted after pressing CALCULATE to enter the payment period in days. The Other option is included to allow you to enter a payment period (example: 6 days) other than monthly, bi-weekly, or weekly, ect. If the Other option for PAYMENT PERIOD is choosen, TERM (LENGTH OF LOAN) must be set to Other or it must be set to Calculate Term. The Mortgage Bi-Weekly option will calculate a monthly payment, divide it by 2, and then it will apply this payment amount bi-weekly (payment every 14 days/average of 26 payments a year). This should result in an average of two (2) extra payments a year, which should pay off the loan faster and with less interest than a conventional mortgage or loan. Please Note: To correctly estimate how mortgage bi-weekly payments can pay off a conventional mortgage loan faster and with less interest, the TERM (LENGTH OF LOAN) must be set to the length of a conventional mortgage loan (usually 15 or 30 years). If you enter a PAYMENT AMOUNT coupled with the Mortgage Bi-Weekly PAYMENT PERIOD, the calculator will assume this payment amount is a monthly payment amount and it will calculate the mortgage bi-weekly payments accordingly. The Mortgage Bi-Weekly option may be disabled by the web site owner. If so, you will probably see the option N/A - for not available.
TERM (LENGTH OF LOAN) - Choose one of several options for the length (term or number of payments) of the loan. If you don't find an option that fits your loan, chose Other. The Other option will prompt you to input the length of the loan (number of payments) when you press CALCULATE. The Calculate Term option allows you to enter a payment amount in the PAYMENT AMOUNT field and the calculator will figure the term. See below for more details.
PAYMENT AMOUNT - This field should be set to 0 if you would like the loan calculator to figure the payment amount for each pay period. However, the PAYMENT AMOUNT field is provided so that if you know the payment amount of each loan payment, you can enter it here and the loan calculator will use this payment as the basis of its other loan calculations (such as calculating the term). This feature is useful if you have a loan and you would like to see the amortization and/or payment dates for that loan. If you do enter a payment amount, you must set TERM (LENGTH OF LOAN) to Calculate Term or you must leave INTEREST RATE blank.
FIRST PAYMENT DATE - Enter a date here if you wish the loan calculator to date each payment. Entering this field is optional. This field is only used if CALCULATE DETAILED PAYMENT AMORTIZATION is set to YES.
IS THIS A MORTGAGE LOAN? - CHECK THIS if you wish to calculate the loan estimate as a mortgage loan. Calculating the loan estimate as a mortgage loan will figure estimates for taxes and insurance and add these estimates to your payment. Checking this option will also display estimated closing costs according to points. This option has no effect if the PAYMENT AMOUNT field is other than 0. UNCHECKED is the default.
CALCULATE DETAILED PAYMENT AMORTIZATION - CHECKING this option will cause the calculator to display each payment (with a payment date if you entered FIRST PAYMENT DATE), along with displaying the interest accrued during the period, amount applied, and the new balance. UNCHECKED is the default. Be aware that the calculation and display of each payment can considerably slow or disrupt display of the results in some browsers.
posted by Barbara Gordon at 4:25 PM
Loan Calculator
1 Comments:
The Finance Choices Loan Calculator is an easy-to-use tool intended to calculate loan repayments and create amortization table in a simply way. You don't need extensive knowledge of either finance or computers. The program allows you to analyze various combinations of loan amounts, interest rates, loan terms, etc. to determine the best possible loan for your budget. This program is excellent for anyone who wishes to keep track of loans and mortgages. This program could help you to choose the right loan and save thousands of pounds through careful loan planning and managing.
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