| Before the advent of electronic calculators and | | | | for "loan calculator." |
| personal computers, the lack of mathematical skills put | | | | Beyond the numbers |
| some consumers at a disadvantage when trying to | | | | Of course, a loan calculator only yields a number, not |
| parse the meaning of down payment percentages, | | | | an approach. That is, once you have calculated how |
| interest rates and installment loans. Whether for real | | | | much of a mortgage payment you will have after a |
| estate or autos, understanding the numbers was a | | | | down payment of x at an interest rate of y for z |
| distinct advantage for both sides in a transaction. Now, | | | | number of years, there is still a decision to make. Can |
| with the help of a loan calculator - on a website, in an | | | | you afford the payment? There isn't a loan calculator |
| electronic device, as a set of numerical tables on | | | | in the world that can make that sort of qualitative |
| paper - even the most arithmetically challenged can | | | | assessment for you, but there are budget programs |
| "crunch the numbers." | | | | that can help. |
| Perhaps the most common loan calculator on the | | | | The best approach is to use a loan calculator in |
| Internet is the kind used for real estate transactions. | | | | tandem with a budget, whether the budget is done |
| Click through online property listings and you will note, | | | | with QuickBooks, on paper or even in your head (if |
| usually at the bottom of the page, an area devoted to | | | | you have a head for numbers, that is). For consumers, |
| loan calculation. You can experiment with various sizes | | | | no single loan or specific account exists in a vacuum. |
| of down payments, enter whatever interest rate you | | | | Rather, there is an intimate and quantifiable relationship |
| want and get a mortgage payment for any length of | | | | between and among income, expenses, assets, |
| loan. It could hardly be easier. | | | | liabilities, interest rates, monthly payments and so on. |
| Cars, too | | | | The big picture |
| The real estate version is not the only kind of loan | | | | A loan calculator is a tool to figure out the term, costs |
| calculator, of course. There are loan calculators that | | | | and monthly payments on a certain loan, based on a |
| will help with simple auto loans as well as the most | | | | number of variables. The various results of the loan |
| complicated corporate financing, although these would | | | | formula, which change based on your treatment of the |
| be found in quite different locations. In addition, | | | | variables, must then be considered in light of your |
| companies that are in the financial services industry will | | | | budget as a whole. It is all very well to work out a |
| have their own, proprietary calculators, and in various | | | | $700 mortgage based on a $40,000 down payment, |
| forms. | | | | but you are getting a little ahead of yourself if you |
| A loan calculator can be a one-step or a multi-step | | | | don't have the $40,000 yet. |
| procedure, depending on how involved the transaction | | | | On the other hand, a loan calculator can be a great |
| is. Most consumers will not need the elaborate sorts of | | | | window to the future, and should be part of every |
| calculations that businesses need, such as Return On | | | | consumer's "tool kit." When you get comfortable with |
| Investment (ROI) or depreciation schedules, and | | | | how they work, they can tell you a great deal about |
| Fortune 500 firms are not likely to use consumer-level | | | | when to refinance, when to pay off a loan - and when |
| online calculators, at any rate. For the most part, | | | | to get your down payment together for your next |
| though, readers of this article will be well served by the | | | | move. |
| assistance they will get with a simple Google search | | | | |