When money needs and needs to take out a loan, many opt for an installment loan. There are only differences in installment loans in terms of terms and conditions, as these may vary from provider to provider. In any case, one should compare the different offers and calculate his installment credit, so that you can not experience any nasty surprises.
What do you need to expect a installment loan?
Actually, if you want to calculate the installment loan, you only need the key data.
This is about three essential features or characteristics that you need to know. So it’s about how to calculate the payable installment for the loan or, in advance, the total amount of interest. So you need information about the loan amount, the interest rate and the term. If these numbers are available, you can easily count on the interest payable and finally the installment loan.
How to calculate installment credit
To do this, the loan amount is first multiplied by the nominal interest rate that you have to pay to use the loan. If the loan amount is then around seven percent, then you can multiply this percentage with a loan sum of 10,000 USD. As a result, you will end up with interest of 700 USD, which you have to pay annually for the loan. If the installment loan is for a period of three years, you will ultimately multiply the 700 USD by three years and then you will experience the total interest amount, in this case, that is 2,100 USD.
And now you can add the loan amount of 10,000 USD to the interest of 2,100 USD, so as to determine the total loan debt. And then you can divide this by the amount of monthly installments here 36, in order to come to a credit of 336.11 USD, which you have to pay off in a month.
Thus, the three key figures: loan amount, interest rates and credit duration are essential. They are crucial for the total installment loan. The borrower must know these key figures in order to be able to count on his installment loan.
What other knowledge is also needed to calculate a installment loan?
In order to be able to count on a installment loan, one must still know which further basic values are decisive for a repayment of the loan. These include, among other things, the classification of the various payments for the installments – are to be paid in the month, always in the same amount or deviating determined. At this point, an exact decryption but a little more complicated. In general, it is difficult to make this calculation yourself, so you can go to a specialist or directly ask the provider of the loan for a calculation. So you can make sure that the bill detail is correct and you have made no mistakes and even misjudged a few USD. Because especially with money transactions you have to be sure and not rely on possibly wrongly calculated results.