Would you like to ask for a loan, but first you want to make sure you can afford the installment of the same? When asking for a loan it is always better to be well informed about its duration and the amount of the installment, only in this way can you have a clear picture of its sustainability.
If you want to know how to calculate the rate of your financing, here you are in the right place. Let’s describe what are the variables that can weigh on the cost of the installment , so if you had to ask for a loan you will already know if it is ideal for you or you have to request another formula.
Financing installment: evaluate to decide
Requesting a personal loan can be the right solution to “remove chestnuts from the fire”. In many moments of life it can happen that you have the need to have access to some extra liquidity.
A sudden expense can happen, you may want to leave for a vacation in an exotic location, or simply the desire to make yourself the new car. All this can be done with a loan ; enough to carry out your project.
But be careful because once you have made yourself “pass the whim” as they say, there will be the installment of the loan to pay and it is certainly not a joke, but something to be taken seriously , so it is good to do the necessary calculations before to take it on.
There are many things to consider before asking for your loan or:
- The credit institution to turn to
- The amount of the installment to be paid
- The conditions under which the loan is paid
- The expenses related to the same
For this reason, if you are looking for information on how to calculate the rate of a personal loan, you are doing the right thing and here we offer you lots of useful information, as we always do on Asa and Sabbath Lily Hawks!
Choosing the most cost-effective financing that best suits your needs is never easy. There are several variables to evaluate as we have seen, the amount of the installment is certainly one of the main ones.
To keep the amount of the installment under control it is necessary to always keep in mind the conditions through which the loan is granted.
There are often opportunities for lower costs and faster delivery times. If a loan is requested online, it is often possible to know immediately the duration of the loan and the amount of the installment.
How to calculate the loan installment?
Find out about how to calculate a loan installment and what are the elements that affect the final cost allows you to avoid scams and to be prepared when you come into contact with the credit institution to request the loan.
The focal point is always to make a precise plan based on your economic possibilities that allows you to create an effective amortization plan that weighs as little as possible on your financial income.
To get a loan and maybe request others in the future it is important to be classified as “good payers”, so evaluating the installment well will always allow you to be punctual in payments and to be able to manage even ordinary expenses related to a loan.
The repayment sum of the requested amount is based on the payment of a certain number of installments whose due date may be monthly, bimonthly or quarterly. These are variables that must be agreed with the credit institution.
All the installments to be paid contain part of the repayment of the sum to be repaid and in addition the interest accrued during the loan period , which can be fixed or variable.
Tan and Taeg in financing
The cost of the final installment is expressed thanks to some factors common to any type of loan. So first you need to keep in mind the definitions of Tan and Taeg .
The Tan is the nominal annual rate, or the interest rate applied to the sum disbursed by your credit institution. Instead, the Taeg is the Global Effective Annual Rate. This means that bank and management fees must be added to Tan by increasing the rate and therefore the amount of the installment.
In addition, in order to calculate the amount of a loan installment, the annual rate or the interest rate applied to the amount lent must be taken into account in addition to the sum paid: the number of installments to be paid and the duration of the loan.
Fast method for calculating the installment
To proceed with the calculation of the installment you have access to two solutions:
- You can rely on online tools
- You can proceed to manual calculation
The manual calculation is to be done only if you have the necessary mathematical skills and also in the field of loans. If you don’t feel able to do it avoid it and go directly to the online method as you could rely on wrong information.
Online, on the other hand, you have simple and immediate solutions as you just need to fill in the required fields with the financed amount, the duration of the repayment plan, the number of annual installments and the interest rate applied.