with Personal Loan is basically any sum of money that is borrowed with the intention of paying it back to a lender with a specific interest rate that has been agreed upon. There are various types of loans ranging from secured to unsecured debts. Another term for unsecured debts is personal or signature loans. They are generally in small denominations and are used by borrowers to carry out small purchases to meet their own personal requirements. Examples of such purchases can include going for vacations or to pay for home renovations etc.
are unsecure in the sense that the lender has to solely rely on the borrower’s promise to pay him or back. There is no formal agreement. Since the granting of such loans is associated with huge amounts of risks, the interest rates for such loans are much higher than the usual ones. The standard procedure for this loan includes distributing the weight of the total sum of the loan evenly across a specific number of installments that have to be paid by the borrower. Added benefits in the form of waving off a certain amount of interest if the entire loan is paid off earlier can also be given to the borrowers. This can act as an incentive to encourage borrowers to repay their loans earlier. As compared to secure d loans, personal loans tend to be more expensive as well as less flexible in nature. They are more suited for those lenders who require short-term loans ranging within a time frame of one to five years.
In most of the countries of the world there are hundreds of various varieties of unsecured loans offered to people. In order to find out which loan is most suited to an individual’s particular needs, comparison tables have become extremely popular to explore the various options available in such type of loans. In a survey conducted in the United Kingdom, the Bank of England found out that a total 22% of the households have taken personal loans. These figures suggest the popularity of such loans amongst the masses.
The repayment of loans is usually done in small denominations often referred to as installments. Calculations play a very important part that helps an individual from paying unnecessary money. It also aids in determining how an individual should plan out his or her finances in order to pay the installments and also how such installments would affect the individual’s liquidity position. An easy solution to such calculation hurdles is the loan calculator that is basically a tool to assist people to determine all the future payments that a loan amount requires. It also helps in screening out the best loan provider in the finance market. The basic function of a loan calculator is to determine periodic payments and interest rates required by a particular loan. The key inputs in this calculator are the principal amount that has been borrowed, interest rate as well as the maturity period. These inputs help in determining all the cost related to a particular loan.