How accurate is the loan calculator?
Our loan calculator provides accurate estimates based on standard loan formulas. However, actual rates and terms may vary based on your credit score, lender policies, and market conditions. Always consult with a financial advisor for precise calculations.
What's the difference between APR and interest rate?
The interest rate is the cost of borrowing the principal loan amount. APR (Annual Percentage Rate) includes the interest rate plus any additional fees or costs associated with the loan. APR gives you a more complete picture of the loan's total cost.
How do extra payments affect my loan?
Extra payments reduce your principal balance faster, which decreases the total interest paid and can shorten your loan term. Even small extra payments can significantly reduce the total cost of your loan over time.
What's an amortization schedule?
An amortization schedule shows each loan payment broken down into principal and interest. In the early years, most payments go toward interest. As the loan matures, more of each payment goes toward reducing the principal balance.
Should I choose a fixed or variable interest rate?
Fixed rates remain the same for the entire loan term, providing predictable payments. Variable rates can change periodically, often starting lower but with the risk of increasing over time. Choose based on your risk tolerance and financial stability.
What fees are typically included in loans?
Common loan fees include origination fees (1-6%), application fees, late payment fees, prepayment penalties, and annual fees. Always ask lenders for a complete list of fees and read the loan agreement carefully before signing.