With personal loans, you will get a lump sum which you will have to pay back over a fixed period of time. In addition to the fixed repayment period, the interest rates are also fixed. Unlike credit cards, you are obligated to repay your personal loans by fixed repayments each month until you pay the whole amount. Often with personal loans, monthly repayments consist of principal repayment and interest charges.
Before applying for a personal loan, you can make use of repayment calculators that help you determine what your monthly instalments would be like throughout your loan tenure.
There are various tools available online that will help you compute the monthly instalment on your personal loan. Almost all banks offering personal loans will have a calculator. All you have to do is keep a few components of your loan handy such as the processing fee, the loan amount, tenure and the interest rate offered. However, many banks offering calculators on their website might already have the processing fee and interest rate keyed in, all you have to do is input the loan amount and tenure to see your monthly repayment plan.
For example, with the DBS Loan Calculator, once you enter your monthly income, the loan amount for which you are eligible will come up on the maximum loan amount field. After that, you will have to enter the amount that you intend to borrow. You will also have the option of maxing out your loan.
In the next step, you will have to choose your preferred payment plan. You get two options, you can either choose to pay within one year or you can choose to pay over a few years. Once you choose your preferred plan, you will get the result immediately.
The very reason that you’ve chosen to opt for a personal loan is because you need money to meet your expenses. Hence, it will be extremely useful to use a repayment calculator to get an estimate of how much the loan is going to cost you on a month-on-month basis. This, in turn will help you budget all your monthly expenses, factoring your loan repayments to manage your finances better.
Knowing the cost and the monthly instalment on your loan is also recommended because it will help you apply for the right personal loan. By using an monthly repayment calculator to compare different personal loans, you can work out the cheapest loan you’re eligible for.
Currently, the banks listed below offer a personal loan repayment calculators:
In addition to repayment calculators offered by banks, there are several websites that have repayment calculators that you can make use of for free, especially if the financial institution you wish to apply for a personal loan with, does not offer an online calculator.
However, it is important to note that any repayment calculator will only provide you with an estimate of what your monthly repayments would be like with the loan, they are not to be taken at face value. Always, work it out with a bank executive to get an accurate repayment plan.