When you take out a installment loan, you probably want to calculate in advance what your monthly exposure is and how much you have to repay at the end. You can calculate the installment loan with a formula, but alternatively you can simply use an online loan calculator.
Calculate installment credit with a formula
There is a simple interest formula to calculate the cost of an installment loan. To do this, divide the capital by 100 and then multiply it by the interest rate. So you get the amount of interest for one year. To receive the interest for certain days, you can divide the annual interest by 360 and multiply by the number of days. However, this simple interest formula does not take into account the monthly repayment.
Since at any rate the loan amount to be paid is smaller, of course, the interest payable to reduce. The extended interest formula is much more complicated to apply. It is therefore advisable to take a formula instead of calculating the installment credit rather to use a finished loan calculator. This offers not only the advantage of simple calculation but also other advantages.
Advantages of a loan calculator
Simply enter your data into the loan calculator and receive the required data immediately. You can enter either the desired monthly rate or the term. You will then receive information about which loan amount is possible. Alternatively, simply enter the loan amount required and the term and you will receive an exact repayment plan with monthly installments. Another advantage of the loan calculator is that you can also compare the cheapest deals online.
After the calculation, the loan offers of a large number of banks are displayed. These include direct banks, which often have the cheapest offers due to the lack of costly branch network. After the comparison, you can simply link to the website of the selected bank by link, to commission the loan online. This saves a lot of time and effort, unlike installment credit, with a formula.