One of the basic information that every future borrower is interested in is the amount of monthly installments that will be charged throughout the repayment period. Accurate calculation of the loan installment is a task for the bank or specialist, but it is worth at least approximate installments to know before signing the contract whether the monthly charge will not threaten the budget we have.
Mortgage Calculation – What You Should Consider
The calculation of the loan installment should start with a careful analysis of all its parameters that affect the amount of the monthly commitment. These primarily include the interest rate on the loan. Not only the interest rate is important, but also whether it is fixed or variable. Another parameter that significantly affects the installment amount is the loan period. Spreading installments over a longer period of time reduces the installment. The type of installment itself is also very important, as it can be fixed throughout the repayment period or decreasing.In addition to all these parameters, one should also take into account the amount of the loan and the associated commission, which is a one-time payment, however, with high loans it is usually also credited, and thus included in the monthly installment.
It is worth remembering that when choosing a loan with a variable interest rate, the amount of the monthly installment will increase if the interest rate increases. However, in the case of commission, it should be taken into account whether it is part of the loan amount or whether it has been added to this amount.
Calculating loan installments using the mortgage calculator
Calculating the installment of a loan repaid in fixed installments, a fixed interest rate, with a commission added to the loan amount is not complicated. In this case, you can perform the installment calculation in Excel, using the PMT function. However, with other versions of the loan, where different variables should be taken into account, this method does not work. You should then use a special formula for calculating the loan installment, which is very complex and it is difficult to make proper calculations yourself. If you want to avoid mistakes that can lead to a big error result, it’s best to use online mortgage calculators. To get the result as close as possible to the current installment, enter all data as accurately as possible into the calculator.However,
Credit calculation – what you should know
When looking for the best mortgage, but also cash or car, as well as other forms of financing with the help of a bank or loan company, it is worth spending time on an approximate calculation of the loan installment. The amount of the calculated installment will help you choose the optimal offer.
In the case of large-scale long-term loans, it is worth knowing that by choosing decreasing installments instead of fixed installments you can save up to tens of thousands. This is possible thanks to faster repayment of the interest installment. Unfortunately, the downside of such a solution is the high load in the initial period, which not everyone can afford. However, the choice of decreasing installments depends on your financial condition and creditworthiness.
Calculating the loan installment of many different offers, in addition, taking into account all variables is not easy and takes a lot of time. To find out the exact amount of the initial and final installments, as well as at various repayment periods, it is worth using professional assistance at the selected bank.
If we want to save valuable time, individual account manager – specialists in difficult finances and consolidation loans – will provide the necessary assistance in calculating the loan installments in various banks.