The best way to approach the process of finding a new loan is as an informed consumer. In order to find the loan you want, you will have to know exactly what you are looking for as far as interest rates, loan terms, down payments, and monthly payments. Using a loan amortization calculator is a good way to get a grasp on what you want in a loan. Use our free loan amortization calculator to understand the effect your terms will have on your loan or fill out our free short form to contact lenders about your loan.
Apply Here – Check out our short form – free quote request
Amortization is the process of repaying your loan through monthly payments of the principal and interest. An amortization calculator can show you what these monthly payments will be. Use our amortization calculator to get an estimate on your monthly payments or fill out our free short form to contact up to four lenders about your mortgage.
A loan amortization calculator provides you with information on the repayment schedule of a loan based on the information you enter in. For example, on a $150,000 loan, with a 7% fixed interest rate, and a 30 year term, the monthly payment will be $997. If you are unsure if you wanted a 30 year term or a 15 year term, you can use the loan amortization calculator to see the advantages and disadvantages. By changing the term to 15 years, the monthly payment increases by $351, making the monthly payment $1,348. Some calculators will also show the difference in interest between the two. On the 30 year term, $209,263 is paid in interest by the time the loan is repaid. However, on the 15 year term, $92,683 is accrued in interest, showing that, if you are able to make the $1,348 monthly payment, a 15 year term is more beneficial. If the higher monthly payment would put to much stress on your income, the 30 year term is better suited to your needs. Knowing this, you would be far more able to make an educated decision someone were trying to persuade you towards a certain loan term.
A loan amortization calculator can also help you see through a loan that will cause negative amortization. Negative amortization is when the set monthly payments do not adequately cover the amount of interest accruing. When this happens, the principal balance increases over the repayment period, instead of decreasing. This should not happen, and is something that only occurs with unscrupulous lenders. However, it is a good idea for you to be aware of negative amortization and to be as familiar with the terms of your loan as possible so that you do not encounter any surprises during the life of your loan.