Loan calculator have revolutionised the payday loan industry by showing consumers how much they can repay. The changes in the payday loan industry as mandated by the Financial Conduct Authority have pointed towards transparency. At Peachy, we have already been showing transparency for many years and one part of this is having a loan calculator.
How to use a loan calculator
The first thing that you need to do is choose the amount that you want to borrow. The difference with a loan calculator is that it will show you the interest you will pay in a more visual way, instead of just writing down the loan amount that you need to repay.
Loan calculator will also show how many repayments you need to make to make in order to pay off your loan. A good loan calculator is supposed to show you every detail about your loan.
Benefits of using a loan calculator
The benefits of using a loan calculator are many. Here are some of the best elements of using an online loan calculator:
- You can budget your finances easier when you know what you are paying: According to StepChange, the debt charity in the UK, 39% of Brits are behind on household bills. Being behind on bills means that budgeting is becoming difficult as more people are under financial pressure. If you are going to borrow money, you need to make sure that you can budget properly and this is where the loan calculator comes in. It will help you know how much you need to repay and therefore you can manage other parts of your finances better.
- You can apply for smaller loans: When consumers choose loans, it can be easier in your mind to visualise borrowing a lot of money because you can’t visually see the money in front of you. It is deposited into your back account and then you start to use it. The loan calculator helps you see how much you will repay which will make you ask yourself questions on how much you actually need to borrow. Smaller loans means that you repay less but the interest can be higher as well.
- You can pay several times: Multiple repayments have changed the online loan industry. The pressure borrowers used to feel borrowing money and having to pay it all back at the end of the month has now subsided because you can pay across several months. Multiple repayments can be anything from 3 payments onwards. Multiple repayments suit consumers who have many financial obligations and need to borrow money but cannot repay the entire amount at the end of the month, because of other commitments. People with families are well suited to this option. A loan calculator helps you understand the multiple repayments that you are going to make.
It’s important to read all the details about your loan when you are choosing your multiple repayments on the loan calculator. Don’t skim read what you see on the right hand side which explains the exact amount that you will repay and how many instalments you can expect to repay.
How can I budget effectively with multiple repayments?
Now that the world of multiple repayments has been introduced to British consumers, budgeting becomes even more important than before. You might even think because you only need to make multiple repayments, it is okay for you to spend on things that you love whether it is gadgets or shopping. Spending within your budget is fine but don’t forget that you have financial obligations when you take out a loan, and multiple repayments are one of them.
One of the best ways to do this is to have a separate bank account for multiple repayments where the multiple repayments are taken as a direct debit. This stops you from defaulting which can affect your credit rating especially if you use your debit card every day for everyday purchases.
If your lifestyle needs to be adjusted to deal with multiple repayments then you should do that. This means cut down on impulsive shopping and when you get paid your salary, make sure that you put the money aside available to pay for your multiple repayments.
Can multiple repayments last as long as a year?
The consumer finance industry always looks at what consumers want and how they can provide them with their requirements. More consumers want to have longer periods of time to pay off their loans such as 6 months to 1 year. At Peachy, we want to make our customers happy which is why we offer multiple repayments for up to one year. It’s all about being flexible to meet needs and requirements of a diverse base of borrowers.
Top tips to spot a good loan calculator
- It will be beautifully designed: A visually appealing loan calculator is a good one because you will be able to understand how it works.
- It has a simple slider for the amount section and the repayment section: This slider should be easy to use and pull up the accurate data
- It will have the exact loan repayment amount written on the right hand side: On our website, the loan repayment amount and other data is written on the right hand side of the calculator. This makes it easy for borrowers to slide and then see how much they will need to repay.
The Financial Conduct Authority wants to promote responsible lending to be at the heart of the consumer finance industry. Loan calculators make this possible because they put consumers in total control of their money. No one wants to find a massive repayment to make that they did not know they needed to repay. Loan calculators make clarity a total priority.