Getting a loan nowadays is not difficult, as long as we have creditworthiness , of course. Many people use credit calculators before signing a contract with a bank. Is it always a good way to check the number of installments or the installment amount will be the optimal solution for them. How do loan calculators work?
The principle of the calculator is very simple. The potential customer enters on the calculator page the amount he would like to borrow from the bank. The slider can set the number of installments in which he would like to pay off his liability. The loan calculators immediately show him how much the installment will be in a given case. The calculators take into account the interest rate on the loan and other costs associated with it. This tool helps borrowers estimate under which conditions the loan will be the best solution for them. Sometimes, it turns out that with a given amount, it would be a better idea to spread the repayments over more years, so that the installment would be lower and less noticeable for the household budget.
Consolidation or cash loan?
As we all know, the costs of various types of loans can differ significantly . Therefore, before we decide to use the calculator, we should make sure that the tool supports cash, consolidation or other type of loan that we care about. Otherwise the installment will not be calculated correctly.
Credit calculators and creditworthiness
The fact that the calculator will calculate the installment that we will be able to repay in our opinion does not mean that the bank will grant us a loan . The bank will first take a look at our credit standing, i.e. all our earnings and expenses. Only when specialists in the bank decide that we will be able to carry the installment amount, will the bank recommend us signing the contract. Therefore, the loan calculator should be treated as a tool for estimating the installment (banks’ offers may differ from each other, so the installment is given as an estimate), rather than as an application that will show us binding guidelines for our particular case.