Having problems in using the loan calculator? Nothing to worry, here we provide a complete guide in helping you the way to fully utilize the function of this calculator as we hope that you can understand your financial status thoroughly and wish also our service can assist you in solving any kinds problem.
Descriptions for each of the fields are provided below, as well as examples for how to use each of the options:
- Periods Per Year: The number of payments per year. Enter 12 for Monthly, 52 for Weekly, for Annual etc.
- Loan Amount: This is the amount that you have borrowed. You can also enter your current balance, if you also adjust the Term of Loan to be the number of years left to pay off the loan.
- Annual Interest Rate: This calculator assumes a fixed interest rate, and the interest is compounded each period.
- Payment (Per Period): This is the amount that is paid each period, including both principal and interest (PI).
- Term of Loan (in Years): Mortgage loans usually have 15 or 30-year terms. If you entered your current balance in the Loan Amount, then for the Term enter the number of years you have left until your loan is paid off.
This calculator demonstrates 4 different types of loan calculations.
Option A: Solve for the Loan Payment using PMT
Use this option when you know how much you need to borrow and want to find out how the interest rate or term affects your payment. For example, a 5-year, RM 100,000 loan at BLR (6.75%) interest results in a monthly payment of RM 1,968.35. The total interest paid over the life of the loan is calculated to be RM 18,100.76
Option B: Solve for the Loan Amount using PV
Use this option when you know how much you can afford to pay each month and want to find out how large of a loan you might get. Keep in mind that there may be other fees in addition to standard loan payment (principal+interest), such as insurance, taxes, etc.
For example, with a RM 2,000 monthly payment, if you got a 5-year loan with a BLR (6.75%) interest rate, the loan amount is calculated to be RM 101,608.15
Option C: Solve for the Interest Rate using RATE
It isn't as common to solve for the interest rate because you may not have any control over what your interest rate can be (other than shopping around for the best one). However, in order to get the best offer from bank, we are ready to serve you with our wide relationship network between the banks. For example, a 5-year loan with RM 100,000, for bank A, they might be offer rate with BRL-1.8% (4.95%), by using the option A, the total interest that you paid is RM 13,090.01. For the same case where bank B can offer rate with BRL-2% (4.75%), applied the same option A, the total interest that you paid is RM 12,541.47, thus the total interest that you can save is RM 548.54, with just a different in 0.2% of the interest rate, so can you imagine how much you can save if the loan amount is RM 200,000, RM 300,000? The interest that you save is double, triple or quadruple than this.
Last thing to be notes : BLR-2% is still not the best offer, by giving us the chance, we certainly can help you to find offer that better than this!!!
Option D: Solve for the Term using NPER
Use this option if you want to pay off your loan early by making extra payments. For example, refer back to the example for Option A. For the same loan amount and interest rate, if you pay RM 400 extra each month or RM 2368.35, the term is calculated to be 4.0285 years (instead of 5 as in option A) - meaning you'd pay off your loan almost 1 year early. You'd also end up paying about RM 3609.86 less interest overall. This assumes that there are no penalties for making extra payments.
Some people prefer to get loans with longer terms and make regular extra payments. The benefit of this approach is that if you run into hard times, you can stop making the extra payments. The downside is that if you don't have the discipline to make the extra payments, you'll end up paying more interest overall.
