Loan Calculators Are Helpful Financial Planning Tools
Without financial planning, it is easy to end up in a bad situation. We would all love to be able to get through life without having to worry about loans and debt, but the reality is that very few Australians have that luxury. Dealing with finances is a necessary part of life in modern society, and it is best to be prepared. Part of being prepared is having a concrete understanding of how a loan works. You don't necessarily have to have a degree in economics to do this, but you do need to take the time to understand the repercussions of any decision that you make before you set anything in stone. Taking advantage of financial planning tools is a helpful way of doing this.
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Loan Repayment Calculators
These are some of the most helpful tools to take advantage of, because it is so difficult to understand exactly what a specific loan entails. Understanding the principle, term, and interest rate of a loan does not tell you what you really want to know, which is how much money you will ultimately spend in interest, and what the size of the monthly payments will be. Using a calculator that can determine this information for you is extremely useful, making it possible for you to determine if it is wise to sign up for a loan. Just because you are approved for a loan, doesn't mean that it is the right decision for you.
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Extra Repayment
One of the best things that you can do to eliminate debt is to make extra payments on your loan. By doing so, you reduce the amount of principle of the loan, which also decreased the amount of interest that you owe on the loan. In order to understand the effect of these payments, there are calculators that you can use in order to determine how making regular extra payments will effect the loan. A good calculator will allow you to specify when the extra payments start in order to see how starting earlier makes a much bigger difference. A lump sum calculator is also worth taking a look at, to see how much of an effect a single extra payment can have on the cost and term of a loan.
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Honeymoon Loan Calculators
There are several different types of loan calculators that can be used in order to understand various types of loans, and how financial decisions can affect loans. One example is the honeymoon loan calculator. A honeymoon loan is a loan that comes with an introductory rate and a variable rate. The introductory rate is typically lower than the variable rate that you pay later on in the loan. This type of calculator can be used to help you better understand how a different introductory rate will effect a loan. It requires information about the principle of the loan, and the total amount of time to pay off the loan. It also needs info about the length of the introductory period, and the two different interest rates. Using this information, a honeymoon loan calculator can determine the monthly payments associated with the introductory rate and the variable rate, as well as determine the total amount of interest that will be paid during the lifetime of the loan. This can then be compared to the amount of interest that would have been paid if there were no introductory period.
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Loan Comparison
One of the most effective tools to find the best option for you is a loan comparison calculator. A loan calculator can be very useful, but without a comparison it can be hard to understand the relative benefit of one loan over another. A good loan comparison calculator will take into account any fees associated with both loans, as well as the interest rates, including whether or not there is an introductory rate. This information can be used to compare monthly payments and overall interest to find the best option.
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Savings Plan
In addition to loan calculators, calculators that can be used in order to understand how finance effects your savings can also be very beneficial. This type of calculator can help you understand how compound interest can work in your favour. A good savings plan calculator will allow you to enter in not only the initial deposit, but the regular deposits that you will make in the future. It will also ask for the interest rate and the term of the plan. It will use this information to calculate your total savings.
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Tax Calculator
This information is useful to everybody. Of course, taxes are unavoidable, but without understanding how much of your money goes toward income tax, it is difficult to make any kind of plans about your future. Your salary and your take home income are not the same. The income tax system in Australia is a fairly simple progressive income tax, so it is not too difficult for your total taxes and your net income to be calculated based on this information. There are also stamp duty calculators available that can be used in order to determine the taxes associated with buying a property. These taxes are more complicated, and vary based on your location in Australia, so this type of calculator is extremely useful. With this type of loan calculator Australia will make more sense in terms of property taxes.
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Borrowing Power Calculator
If you are thinking about making a major buying decision, like a home, it is a good idea to get some idea of how much you can borrow before you approach a financial institution. You won't be able to know without actually applying, but you can get some idea using calculators available on the net. It's good to get some idea of what you might be eligible for. This way, you can start to get an idea of what range is reasonable. This information can come in handy when you start to think about whether or not it makes sense for you to start thinking about buying a particular home, car, or other expensive purchase.
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