Almost every one of us has experienced borrowing money from someone else in order to help pay for unplanned expenses. For some, loans are a natural part of their lives which helps them get through their day to day activities. Today it has become relatively easier for just about anyone to apply for personal loans with banks and other related establishments setting up and integrating their services over the internet. This in turn makes it positive for their clients to borrow money at any given time when the need calls for them to do so. Applying for personal loan is easy; however, a number of individuals often get into trouble during repayment. Let us look at some of the factors that come into play when calculating your personal loan.
Familiarizing Yourself with Loan TermsBefore you start calculating your personal loan, it is a good idea to become more familiar with the terms used by banks to help avoid confusion. This can help you save time as you don’t need to have these terms explained to you.
Amount of loan, for instance, is a pretty straightforward term that is used to describe the total amount that you intend to borrow.
Tenor, on the other hand, is the length of time until the loan is due.
Interest Rate is defined as the amount charged and expressed as a percentage for the use of money by a lender to a borrower.
Estimated Monthly Installment is the fixed payment amount made by a borrower to a lender which is to be paid at a specific date each calendar month.Estimated Total Payment, just as the name implies, is the total cash out to be made on the loan over the specified period of time. It should be noted that the payment also consists of Loan principal and total Interest.
Last but definitely not the least is the Flat Interest Rate which is a term used as the fixed interest charged to the loan.