Loan Calculator
Loan calculator is a finance tool that helps you to calculate the interest amount on the loan amount. With the help of this tool you can manage your finances in a better and simpler way.There are different types of loans based on the nature of calculation of interest amount.
In this calculator we can calculate interests on three types of loans.Deferred Payment Loan, Amortized loans, and Bond Loans
Deferred Payment Loan is a type of loan where the borrower can pay the loan after it reaches the maturity.During the defferal period, no amount of money has to be payed. This type of loan normally follows the compound interest rate but there is no regular payment of interest before maturity and at the end of the loan term, the borrower needs to pay all the amount of money including the interest amount and the principal amount to the lender.
In our calculator above, we used compound interest rate method of calculation but Deferred Payment Loan may be calculated using the simple interest rate method as well. All depends on the agreement between the borrower and the lender. Loans such as student loans, home loans, Mortgages, Personal Loans, Auto Loans, Credit Cards ets.. follows the Deferred payment loan method.
In our calculator above, we used compound interest rate method of calculation but Deferred Payment Loan may be calculated using the simple interest rate method as well. All depends on the agreement between the borrower and the lender. Loans such as student loans, home loans, Mortgages, Personal Loans, Auto Loans, Credit Cards ets.. follows the Deferred payment loan method.
Amortized Payment Loan is a type of loan in which equal regular payment is made through out the loan period. After each regular payment, the next interest rate is calculated on the remaining principal amount. At the end of the term of the loan, the loan is completely paid off. This type of loan is also known as EMI loan. It is one of the most popular loan offered by banks and financial institutions.
Amortized Payment Loans provides a predictable repayment structure and it becomes easier for both: money lender and money borrower to manage their finances. It decreases the burden of paying huge lump of money at the end of the loan term.
This payment is applicable for all types of loans like home loans, car loans, personal loans which are paid in installments. These days this type of loan is often offered by the online sellers for the purchase of products.
Amortized Payment Loans provides a predictable repayment structure and it becomes easier for both: money lender and money borrower to manage their finances. It decreases the burden of paying huge lump of money at the end of the loan term.
This payment is applicable for all types of loans like home loans, car loans, personal loans which are paid in installments. These days this type of loan is often offered by the online sellers for the purchase of products.
Bond Loan is a type of loan in which borrower issues multiple bonds at a certain face value and that bond is distributed to the investors. Investors buys the bond at certain amount, certain rate of interest and for certain period of time. After the maturity of the bond, the borrower pays the face value to its investors. This allows the borrower to raise funds from the multiple investors at once from the market. Also it provides issurance to the investors that they will get a face value of the bond after the maturity.
