There are many consumer wishes, are you looking for a new car or a new apartment? If you don't want to postpone purchases until later, you can apply for a loan. Installment loans help with payment shortages. We explain how the calculation of installment loans works and you calculate your personal optimal installment loan. With the right installment loan, projects can be financed cheaply.
But what is the "right" loan? In addition to choosing a cheap provider, the decision for the right term is important. If the loan runs too long, this increases the financing costs. If repayments are made too quickly, the monthly charge is too high. We explain how you can use the correct calculation to outline the installment loan, repayment history and interest costs and find a suitable financing solution.
Find cheap installment loans by calculation
Especially in the case of larger projects, you should work out various terms when calculating an installment loan. For a loan of USD 30,000 with 6.0 percent effective interest, a total of approx. USD 3,700 accrues over four years. If the same loan is repaid in three years, this reduces the interest costs by more than USD 900. In return, you have to pay a significantly higher monthly rate. If, on the other hand, the loan is paid off over a period of five years, the total interest payable increases by almost USD 1,000. You pay less every month.
When choosing the right term, it should be noted that the interest rates generally increase with the term. If you agree on a significantly longer term, this increases the financing costs twice: once through the slower repayment and once again through the higher interest rate.
You should therefore already compare various offers while you are planning the installment loan and the repayment process. Otherwise, the calculated plans may not be able to be implemented later. With the comparison calculator on Astro finance you can find out directly on the screen which interest rates are currently available for you personally.
Way out: Low rate and special payments
On the one hand, many borrowers want to keep the monthly charge low, but on the other hand they want to pay as little interest as possible. For a loan to make this possible, the offer must meet two requirements. First, the interest rate has to be cheap even with a longer term. Secondly, the loan must enable free special payments - i.e. without prepayment penalty. In this constellation you can keep the monthly fixed costs low and at the same time accelerate the repayment at will and liquidity situation. If necessary, pay attention to the minimum amount of special payments in order not to be treated as an advance payment on the credit installment. This is the case for some banks when unscheduled payments do not exceed a certain multiple of the monthly rate.
If you cannot decide directly on a loan offer, you have the opportunity to change the key data in the loan calculator and test it again. If the loan term increases, the monthly installment becomes lower, but the cost burden of the interest increases continuously with each month of the extension, because additional interest is due for each month of the loan term. The one-time processing fee is calculated as a percentage from the amount of the loan. If the desired loan amount increases, you have a higher processing fee in the total loan amount. A processing fee of 2% for a loan amount of 10,000 USD is, for example, 200 USD. If you choose twice the loan amount (20,000 USD), you also pay twice the application processing fee. When calculating an installment loan, different loan models can be calculated using this formula so that you have finally put together the loan offer that suits your current options.
Installment loan calculation: What costs more term?
The amount of the loan can be agreed based on the personal monthly income and with the installment loan calculation you can find out how much the total loan will be, because there are also the interest and a bank processing fee. The amount of interest and processing fees vary from bank to bank, the installment loan calculation is carried out free of charge and time-saving for you on the comparison portal Astro finance.
Enter the amount you would like to borrow and add the term and the purpose of payment in the next field. As soon as you confirm the entries, you will receive current offers and can choose a bank where the installment loan is very cheap. If you choose the offer because you believe that you have used the installment loan calculator to find the bank with the lowest interest rates, you can submit the loan application online immediately.
Tip: Save flexibly with special payments
Check the market situation again 1-2 years after borrowing. It is often possible to achieve more favorable conditions, for example because the interest rate has dropped or your credit rating has improved in the meantime. Then you can take out a new loan and use it to replace the old loan. This is also why installment loans with free special payments are an advantage.
With the installment loan calculation to the desired loan
Important investments can hardly be postponed, the desired loan can be calculated in several ways on the comparison portal Astro finance in a short time and without costs, so that you can realize your loan requests if all bank requirements are observed. Flexibility is more important than ever in the professional world, if you need a car to get to your place of work at any time and regardless of public transport, use the installment loan calculation to find a low-interest loan offer. In the event of short payment bottlenecks, some banks can request an installment break.
An installment loan pays off for special consumer offers, because the offer will probably no longer be available later. Manageable and constant monthly installments help you to calculate your own income and expenses every month so that you can repay the total amount of the loan in accordance with the contract. Consumption requests of all kinds can be financed with this type of loan and the installment loan calculator tells you in advance how high the expected total costs for the loan will be afterwards. You select the intended use in the installment loan comparison, for example if you are planning to buy a car, you will receive bank loan offers for the purchase of a car, then you will see all suitable and cheap installment loans and can select an offer online.
Conclusion: It pays off to calculate in several directions
If you plan installment loan and repayment history with one calculation, you should calculate more than one variant. Check out how changes in term affect credit rates and interest costs. Longer terms lead to higher financing costs, but also relieve the budget. Better than an overly ambitious repayment is a loan with a moderate charge and the option of free special payments.