It is essential to calculate the installments of a loan before doing so. If you don’t know how, here we explain! When borrowing, one of the most important information you have to have is how much you can pay back in installments per month. This means that before applying for the loan, you will need to calculate the loan installment, ie know the amount of your monthly installment with interest. It sounds confusing, but let’s make it easy for you not to take a step higher than your leg and ask for a value you won’t be able to pay off.
How to start calculating the installments of a loan?
It’s not too secretive: To apply for a loan, you need to know how your financial health is doing. It’s time to separate your payslips and income vouchers and put in the tip of the pencil. Set your financial profile and write down your earnings, expenses, investments, emergency reserve and more.
This phase is crucial in knowing exactly where to apply the money you will be asking for and not getting further tangled with the bills.
Pay close attention when making the expense spreadsheet, especially in the inputs and outputs part. Once planning is over, it’s time to define your strategies. Why do you want to apply for a loan? Which credit line is ideal? What are your goals? Is your only solution a loan? How to calculate the installments of a loan?
By answering these questions, let’s get back to your expenses and earnings. Many of our expenses are needed: rent, electricity, water, internet, supermarket and more. It will hardly be possible to decrease the value of these fixed accounts, so you already know more or less how much of what you earn goes towards paying the required ones. Ideally, this should not exceed 50% of your income.
What is left, we can call extras, because it is the money you have and is intended for other expenses not necessarily fixed – such as repayment of a loan. It follows the reasoning: 50% is necessary spending and 50% is extra spending, totaling 100% of your income. Where does the loan installment come in? Well, the ideal is that the value of your portion does not exceed more than 30% of your monthly earnings.
If you do not understand how to calculate how much you can pay in loan installments, do not worry that we help you!
Let’s make an account. Assuming you earn $ 5,000 a month, that’s your monthly income. 30% of this amount is equivalent to $ 1,500. Therefore, the ideal is that your installments of your credit do not exceed $ 1,500. If you need a value of, let’s suppose, $ 9,000, you can split it at least 6 times for your payment not to exceed 30% per month.
In our loan simulator you can put in how much you need and how many times you want to split.
From this we were able to make a selection of pre-approved proposals to present to you. But having already calculated how much you can afford per month makes it easier to simulate closer to your reality.
In short, it works like this:
- Make a spreadsheet of your monthly income
- Calculate how much is 30% of this amount (this is the maximum you can commit from your loan installment income)
- Defines how much you need to borrow and how many installments you can make by committing up to 30% of your earnings.
- Make a simulation on our site and choose the offer that has the most to do with you
Ready! This is the simplest way to calculate how much you can pay per month in loan installments. This calculation fits all loan modalities, and what changes between them are the conditions.
Which mode is better for me?
The best type of credit depends on some factors, such as how much you want to borrow, what you can offer as collateral, what your CPF status is, and so on. If you can prove your income and are not looking for a very high amount to invest in you, from your personal loan simulation, with interest starting at 1.9% per month.
If you have a repaid car in your name, opt for vehicle refinancing. You get a higher value, up to 70% of the value of the car, for lower interest, starting at 1.69% per month. Best of all, you continue to use your vehicle normally while you are paying off your debt. Place your order here and get access to up to 10 proposals from our collaborators.
Is it time to start a business or make a bigger investment?
Use your property as collateral. In property refinancing, you put your property, be it residential, commercial, or even land, as a way of ensuring that you will repay the loan. This type of credit works best if you need a lot of money because it gives you up to 60% of the property value, with interest starting at 0.99% per month and up to 20 years to pay. It’s a good deal for anyone who wants to start a business, for example. Make your simulation now!
See how easy it is to calculate the installments of a loan?
If you have further questions, browse our site! At this link you will find a lot of content for other questions you may have. And don’t forget to do your simulation!