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What is a Loan Calculator and How Can it Help Me?

By
Alex Huntsberger
Alex Huntsberger is a personal finance writer who covered online lending, credit scores, and employment for OppU. His work has been cited by ESPN.com, Business Insider, and The Motley Fool.
Read time: 2 min
Updated on April 29, 2022
young woman with black curly hair holding her phone and using a calculator
Not sure if you can manage that loan? Try a Loan Calculator to find out.

If you've ever searched online for a loan of any kind, odds are you've come across something called a "loan calculator." And in case you were wondering, this type of calculator is different from the one collecting dust in the back of your junk drawer.

A loan calculator is a good way for you to find out if a particular loan will fit into your budget, and how long it will take to pay it off. Most online lenders offer loan calculators and, like airplanes and medication, they really only work when used correctly.

In order to get the most out of a loan calculator, there's certain information you'll need to have:

  • The balance of the potential loan
  • The interest rate
  • Additional finance charges
  • The length/term of the loan
  • The start date of the loan

Once you've entered this information, you'll see how much your monthly payments would be. You'll also see how much interest you'll pay over the life of the loan, which is an important factor to consider.1

A loan calculator is just one tool that you should use when thinking about taking out a loan. After all, it takes more than a hammer to build a house. So don't settle for just one resource before deciding how to select a loan. There are a number of other tools and services that can help. It may even be a good idea to speak with a credit counselor, like the ones available through the National Foundation for Credit Counseling.

Check out these free and easy online loan calculators at:

References:

  1. "Loan Calculator" InvestorWords. Accessed February 4, 2016. https://www.investorwords.com/8630/loan_calculator.html

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