Personal Loan Calculator: How it Works, What you need to know
Get to know how the Loans NZ personal loan calculator works, and how it can help you get a quick cash loan online today!
Personal Loan Calculators
Personal loan calculators are useful tools for helping you to work out what your loan repayments will be. You can find them online in several locations. Banks have personal loan calculators on their websites, alternative lenders also have calculators on their websites too. In addition, ASIC has some personal calculators that you can use. The type of loan you are borrowing will determine what calculator you use.
This blog post will try to tell you everything you need to know about using personal loan calculators. We will tell you how to use them and which ones you should use. It will help you in determining what your repayments will be for your specific type of loan. In addition, we will give you a bit more information about personal loans, so any questions you may have about them, should hopefully be answered here.
What is a personal loan calculator?
The purpose of a personal loan calculator is to help you determine what the repayments of your loan will be. It can be useful in deciding whether you should take out a loan, because it will tell you how much the loan is going to cost you and how long it will take for you to repay the loan.
However, personal loan calculators are not all the same. It depends on what type of loan you want to borrow, which will determine what calculator you use. For instance, for small short-term loans of amount under $2000, you will need to use a payday loan calculator. But for larger personal loan amounts, that is amounts above $2000, you will have to use a personal loan calculator. This is because the interest rates of each type of loan are different.
Where can I find personal loan calculators?
The best place to go to find loan calculators in ASIC’s Money Smart website. They have a payday loan calculator which you can find here: https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/payday-loan-calculator.
They also have a personal loan calculator which you can find here: https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/personal-loan-calculator
As mentioned above, if you are getting a personal loan from a bank they also have their own personal loan calculators that you can use. Or, if you decide to borrow from an alternative lender, they also have personal loan calculators. We have a loan calculator right here at the top of this page!
What information do you need to provide?
To calculate how much your repayments will be, you will firstly need to provide a few pieces of information. These details will just have to be input into the calculator which will automatically compute the details that give. Here is a list of the information you will need to show:
- Type of loan – It will whether it’s a variable rate, fixed rate or a secured car loan
- Loan amount – this refers to how much you are borrowing
- Loan term – it is the length over which you would like to repay the loan
- Interval of your payments – this means when you would like your payments to be made: weekly, fortnightly or monthly
- The interest rates – this will be how much the loan will cost, which you can find next to the terms of the loan. However, payday loans have a fixed monthly interest rate of 4%.
What are other types of personal loan calculators?
Above we spoke about personal loan calculators – but there are some other calculators that may be of interest to you too. The following table is a list of other loan calculators that you might decide to use:
| Mortgage calculator | As the name implies, this type of calculator helps you to calculate how much your mortgage repayments will be. It can also help you to work out how much you will need to pay to pay your home loan off soon. |
|---|---|
| Compound interest calculator | It is a useful calculator to help you determine how compound interest can help you to increase your savings. |
| Income tax calculator | The purpose of this type of calculator, is to help you determine how much income tax you should be paying, based on what your annual salary is. |
| Superannuation calculator | This calculator helps you to determine how much you will have in your superannuation account when you retire. It will ask you to provide more information than the other calculators. For instance, it will ask for your age, your income and the age you would like to retire. It will also ask details about your fund’s fees. |
| Credit card calculator | These calculators help you to work out how much it will cost you to repay your credit card debts, and how long it will take to repay them. |
| Budget planner | This is a different type of calculator than the ones previously mentioned, as it does not refer to debt repayment. In fact, it helps you to determine your budget, by calculating what you need to spend per month on your living costs. |
| Savings goals calculator | This is another calculator that is not designed for debt repayment. Its purpose is to help you work out how much you need to save to achieve your savings goals. |
You can find these calculators on Money Smart’s website by visiting this link: https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps
All you need to know about personal loans
What are personal loans?
Personal loans are loans that you borrow from a lender to finance any sort of expense that is personal to the individual borrower. They are usually loans of smaller amounts that can range from a few hundred dollars to a few thousand dollars.
Personal loans can be unsecured loans or secured loans. This former means that the loan is not tied to an asset as security for the repayment of the loan. The latter means that an asset is tied to the loan as a security. This is so that if for some reason you could not make your payments anymore, the lender has the right to repossess the asset. They also have usually fixed interest rates, that don’t change over the duration of the loan term. They also have a fixed repayment period that you choose before you enter the loan contract, which are often referred to in months. Longer repayment periods will mean that your loan repayments will be smaller, though you will end up paying more in interest for a longer loan term.
How much do personal loans cost?
How much you want to borrow will determine how much your personal loan will cost. For instance, for an amount less than $2000, it will cost an establishment fee of 20% plus additionally monthly fees of 4%.
However, for amounts above $2000, it will cost a maximum establishment fee of $400 plus a maximum yearly fee of 48% including the establishment fee.
Though to do these calculations this is where you should use the personal loan calculator shown above.
How do you apply for personal loans?
These days the best way to apply for personal loans is to get them online. However, you can apply for personal through your bank as well. Though, applying for personal loans online is notably the easiest option.
You will have to fill out an online application form that will ask you how much you want to borrow, and how long you would like your repayment period to be. It will also ask you for a reason why you want to borrow money. In addition, you will just have to provide some ID, proof that you receive regular income and a contact number and email address.
What can personal loans be used for?
The great thing about personal loans is that they don’t have to be used to pay for anything specific. It really is up to the person borrowing the loan, what they decide to do with it. Though here are some examples of what people use personal loans to help fund:
- Medical bills
- Dental bills
- Car repairs
- Car rego
- Household items i.e. fridges, washing machines etc.
- House hold renovations
- Utility bills
- Travel expenses
- Wedding costs
- Funeral costs
- Debt consolidation
Where can you find personal loans?
As mentioned above, you can find personal loans online. You can also find them through banks.
What do you need to apply for personal loans?
To apply for personal loans, you will need:
- To be at least 18 years of age
- Be an Australian citizen of permanent resident
- Be in Australia
- Receive regular income (at least for the last 90 days)
Not be declared bankrupt
How do you repay personal loans?
Loans are usually repaid by setting up a direct debt. This means that your loan repayments will come out of your account automatically. They can be set up to match your pay cycle.
What do you need keep in mind when taking out personal loans?
There are a few things that you need to be aware of when taking out personal loans. The first thing is to do is to really consider whether you need to take out a loan or not. It can be expensive to borrow money, and it’s worth taking the time to consider whether it’s the best option for you.
However, after you’ve had a good think about how much you would like to borrow, the next thing to do is work out how much you can reasonably afford. This is important, as the worst thing would be that you are unable to repay the loan and you get yourself into a sticky debt situation.
Finally, once you have worked out how much you can afford to borrow, you should factor the repayment amounts into your budget. This is to prevent you from missing out on any repayments, which may result in expensive penalty fees for defaulting on payments.
What are the disadvantages and advantages of personal loans?
Personal loans can be incredibly convenient, but there are some drawbacks too. The following table is supposed to help you way up the pros and cons of getting personal loans, for you to make the best decisions possible.
| Advantages | Disadvantages |
|---|---|
| Easy to apply for | Can be expensive |
| Receive loan with 24 hours | Might perform a credit check, which will be recorded on your credit history |
| Helps pay for unexpected expenses | Can cost expensive penalty fees if you miss payments |
| Helps you build up a good credit rating if you are reliable with your payments< | If you miss repayments you could damage your credit score |
| Responsible lenders won’t lend you more than you can afford | There are some personal loans scams out there |
What if you want to pay off your loan early?
Sometimes you may want to pay off your loan earlier than the end of the loan term. This is sometimes a good idea, because it saves you having to pay lots more in interest fees. Nevertheless, you should check with your loan provider first, and it is always something that you should check before entering a loan contract. Some lenders allow you to pay off the loan early, without having to pay any extra fees, though some other will charge you if you want to pay it off earlier.
Conclusion
In summary, it’s useful to calculate your personal loan repayments using the calculators mentioned above. This will help you to determine the cost of your loan before entering the loan contract. It will also help you to budget the loan repayment amount into your living expenses. Nevertheless, it’s always important to consider whether getting a personal loan is the right option for you. They can be quite expensive so it’s worth considering if it really the right option for you.
Once you have done your research and considered all the options, then you should go ahead with getting your personal loan. They are easy to apply for and you can receive them within 24 hours of applying. Before you know that expense you had to pay for will be covered. Apply for one with Loans NZ loans today.