Loan Payment Calculator
In today’s world, loans are a part of life — you expect to borrow when you purchase a vehicle or home. It’s also become common to finance other high-priced purchases, like appliances and technology. In fact, more than 80 percent of Baby Boomers and Millennials —and almost 80 percent of Generation X —have a loan in some shape or form. That’s why loan payment calculators are such a helpful tool, as they give you perspective when planning on how you’ll pay off your loan, as well as if you’ll pay it off early.
Why Is Paying Off My Loans Essential?
The most significant motivator for paying off your loans comes from the fact that you agreed to when you applied for one. If you stop making payments, the lender is free to repossess the purchase, such as your automobile. So, that’s one reason paying off your loans is essential, and also why it’s critical that you calculate your loan payments and costs before accepting one.
You can take advantage of another set of benefits when paying off your loans, including the ability to:
- Boost Your Financial Security: When you make your final payment, that monthly payment becomes yours now. You can stock it away for retirement, rainy days or emergencies — either way, it’s yours, and that helps your financial security.
- Lower Your Stress Levels: Finances can tax you, leaving you mentally, emotionally and physically drained. In fact, one study discovered that one in four Americans has symptoms of post-traumatic stress disorder (PTSD) due to financial woes. Complete your payments, and you have one less thing to worry about in life.
- Decrease Your Number and Amount of Bills: It’s not uncommon to have multiple loans, such as for your car, home and education. When you start knocking down your loan numbers, such as by putting extra money toward your auto loan, you lower the number of bills coming in each month, as well as your expenses.
- Raise Your Credit Score: Another motivator for paying off your loans is your credit score, which plays a significant role in your approval for loans and other lines of credit. When you lower your loan amounts, your credit score starts to recover and improve.
How Does Paying Off My Loans Early Help Me?
A loan repayment calculator is helpful not only when you’re thinking about applying for a loan, but also when you’re considering paying off your loans early. Completing your loan ahead of schedule does offer one critical benefit — it limits how much you’re giving your lender in interest. While you’ll have to direct more of your money to the loan, you could save quite a bit of interest by paying it off sooner rather than later. Afterward, you can start using your would-be loan payment for what you want, like emergency funds.
Why Is Saving Essential After Making a Loan Payment?
If you’ve purchased a car before, you’re probably familiar with the idea of saving your previous car payment for the down payment on your next vehicle. While it’s rewarding to treat yourself, it’s essential to keep in mind that you should be saving some of your money in case of an emergency, which can range from repairs to your car to layoffs at your work. Anything can happen, and if you can provide yourself a cushion, you should. Look at it as a loan payment to yourself.
What Would My Loan Payments Be?
The loan amount, the interest rate, and the term of the loan can have a dramatic effect on the total amount you will eventually pay on a loan. Use our loan payment calculator to determine the payment and see the impact of these variables on a specified loan amount complete with an amortization schedule.