Taking a loan is always a risky proposition, no matter how easy the guys at the loan department might make it seem at the beginning. Getting a loan sanctioned can, in fact, be quite tedious. Even if you have factored in all the lengthy paperwork that goes with it, there are a lot of things to consider before you put your signature on the dotted lines. Else, there might be nasty surprises coming your way later on.
So, the best way to get started with this is to do your maths beforehand; or you risk finding yourself in the midst of a debt trap. It is here that the loan calculator comes in handy as these can provide you with a fairly accurate figure of the amount you need to shell out every month to repay the loan.
Loan calculators such as the one you get at Pigly will also save you from dealing with long and often complex formulas. Even if the very sight of such formulas isn’t enough to put you off, especially if you have always hated maths right from your school days, working your way through such formulas can also be quite error-prone. For one wrong entry made can jeopardize the entire calculation, and you may never get to know as well.
To get started with the Pigly loan calculator, the first thing you will need to enter is the loan amount, or the amount that you wish to borrow. For a partial loan where you have repaid a chunk of the original amount you have borrowed, enter the amount you are still left to pay.
In the interest field, enter the interest rate applicable. It is specified in percentage and is calculated on a yearly basis. If it is a fixed interest loan, simply enter the value in the field. However, if it is market-linked, which means the value changes every year depending on a range of factors, make sure you enter the value that is relevant for the current year.
In the loan term field, enter the time span you think you will need to repay the loan. A shorter time span here will mean more amount to be paid in monthly installments. That way, you also eventually end up paying less as the total interest amount paid is going to be lower.
It is just the opposite if you choose to pay back the loan over a longer duration. Your monthly installments are going to be less, but you end up paying more at the end as there is going to be more interest amount you will be paying. The general rule of thumb here is if you can spare more every month, choose to repay the loan faster. Else, do it over a period that entails paying an amount that you will be comfortable doing every month.
In the Other Loan Details section, enter any upfront payment amount that you might have been required to pay. Else, leave it if there was no such obligation. The same is the case with the Loan fees. If there were any fees involves, enter it here, else leave it blank.
The same applies to the Balloon payment option as well. For the uninitiated, the balloon payment option refers to a loan scheme wherein the monthly installments are quite manageable. However, that is under the premise that you will be paying a chunk of the borrowed amount in lumpsum at the end of the loan term. So, if you have agreed to such a plan, enter the balloon payment that would be applicable at the end.
If there is a field that says, loan start date, enter the date from which you will be liable to pay back the loan amount. This will let you know how long the loan is relevant, or till when you will be paying the installments.
After you have come thus far, click on the Calculate button. The Pigly loan calculator will provide you with a detailed break-up of the amount you will need to pay every month. You will also get to know the total interest you need to pay over the years as well as the total amount that you eventually have to pay.
The only thing you can tinker with here is the loan tenure to adjust the monthly installment considering that you can’t compromise with the principal amount. See which amount you will be most comfortable paying each month to repay the loan back.
Also, you will do yourself good if you become acquainted with the various terms and concepts associated with the loan, or for that matter, almost anything related to personal financing. This is exactly what you get at Pigly, your one-stop solution to all your personal financing needs.