If you’re planning to apply for a personal loan or home loan, it’s important to use a loan calculator. This tool will help you to make the right decision prior of applying for a loan.
Here are some reasons why you should use a loan calculator:
- It protects you from loan sharks
It is very common for most Filipinos to apply for loans. But, in spite of the necessity, it’s necessary to ensure that you have the capability to repay the loan and at the same time spare yourself from loan sharks.
- Annual percentage rate
Before deciding to avail the loan, it makes sense to know the annual percentage rate of your proposed loan amount. Through the help of the loan calculator, you’ll be able to compare lenders that can give you lower APR.
- Loan period
The loan calculator will let you know the total amount to repay and the loan period. The loan period can be short term or long term depending on the borrowed amount and the capability to repay.
- Stress-free payment options
Many money lenders have created loan calculators that will help borrowers to choose stress-free payment options. This way, you will be well-informed about the process.
Comparing loans is made easy by using loan calculators. As mandated by the Republic Act No.9510, money lenders should give accurate and fair information to their clients about their loans.
It’s very easy to use a loan calculator. All you have to do is to input information including the proposed loan amount and the preferred repayment term. The maximum amount that you can borrow and the monthly payment will appear on the calculator. However, the figures that appear on the calculator are just estimate. Nevertheless, you’ll have idea how much you can avail for the loan and the monthly payment that you can afford to repay.
Loan Amortization/Mortgage Calculator
This calculator computes the total estimated monthly amortization to pay including both principal and interest and the required gross monthly income for you to qualify for a home loan based on your desired loan amount, repricing period, and repayment term. To show an example; lets illustrate how a housing loan amortization works, let’s try to use the Pag-IBIG Fund amortization calculator.
See Also: How to Apply Pag-IBIG Short Term Loan
Steps to use an amortization or mortgage calculator
- Input your preferred loan amount. It should be equal or higher than the minimum home loan amount set by the lender as stated on the example we input 500,000 pesos.
- Then select a repricing period. You can choose on the drop down list ranging from 1 to 30 years—the longer the period, for those who don’t know yet take note this “the higher the interest rate is”. See the example we used for the amount of 500,000 pesos the repricing period: 5 years; 7.270% and the terms: 5 years to pay,
- Select a terms of payment. It can be minimum as short period as 1 year to as long as 30 years maximum.
- Then lastly click Compute button. The calculator will show you the principal and interest and the required gross monthly income. See the computed example above: principal interest: Php 42,918.39 and the required gross monthly income must be: Php 143,061.31