How To Use A Personal Loan Calculator In Singapore

Money matters can be confusing. Now that the cost of living in the Lion City seems to be in a never-ending race with salaries, many people find themselves juggling numbers just to reach their goals, whether that is saving for that BTO flat or trying to afford a staycation.

Thankfully, personal loans are there. This can be either a lifesaver or not depending on how you use it. But before you apply for one, there’s a not-to-secret tool you should know about: the personal loan calculator.

It might sound about as exciting as watching paint dry, but trust us that this is about to become your new favourite thing.

Ever wondered how much a loan would cost you even before you apply for it? Now you don’t need to do any type of guesswork since a personal loan calculator is designed to help you estimate the cost of any loan.

This is like having a mini financial advisor right at your fingertips minus the fancy suit and the hefty consultation fees. All you need to do is input a few key details about the loan you’re considering and this will give you a good idea of what you’re in for.

While loan providers are undoubtedly helpful, a personal loan calculator gives you the power to play around with different scenarios on your own time.

For example: do you want to see how a longer loan term affects your monthly payments? A personal loan calculator lets you explore these options without any pressure and judgement.

Before you start punching numbers into a personal loan calculator, you’ll need to have some key information at hand. This typically includes:

• The loan amount you’re considering
• The loan term (how long you plan to take to repay the loan)
• The interest rate (this can vary widely depending on the lender and your credit score)
• Any additional fees (some lenders in Singapore charge processing fees or early repayment penalties)

Pro tip: If you’re not sure about the interest rates, take a quick look at what different banks and licensed moneylenders in Singapore are offering.

There are tons of personal loan calculators available online but as you probably know, not all are created equal. Look for one that’s tailored to the Singaporean market. Many local banks offer personal loan calculators on their websites which can be a good place to start. These calculators often take into account local factors that generic international calculators might miss.

This is where the magic happens. All you need to do is enter the loan details into the designated fields. Some advanced calculators might also ask for additional information like your credit score or income level.

Click calculate then wait for the personal loan calculator to work its magic and present you with a breakdown of your potential loan. This typically includes:

• Your estimated monthly repayment
• The total interest you’ll pay over the life of the loan
• The total amount you’ll repay (principal + interest)

What you need to do here is to take a good look at these numbers. Do they align with your budget and financial goals? If not, it’s time to move on to the next step.

Play around with different variables to see how they affect your loan. You may:

Adjust the loan term to see how a longer or shorter repayment period impacts your monthly payments and total interest.

• Change the loan amount. After all, maybe you don’t need to borrow quite as much as you initially thought?
• Input rates from different lenders to see which offers the best deal.
• Remember that the goal is to find a loan that fits comfortably within your budget while minimising the total amount you’ll pay in interest.

Most personal loan calculators in Singapore don’t factor this in automatically so you’ll need to do a bit of legwork. Check your credit score with the Credit Bureau Singapore then research what kind of interest rates are typically offered for your score range.

Some personal loan calculators might not account for additional fees like processing charges or early repayment penalties. Read the fine print from potential lenders and factor these costs into your calculations manually if needed.

Don’t put all your eggs in one basket and try using personal loan calculators from different sources to get a more rounded view. Compare the results – if they’re significantly different then it might be worth digging deeper to understand why.

Borrowers may easily get fixated on the monthly repayment amount but don’t lose sight of the bigger picture. A lower monthly payment over a longer term might seem attractive, but it could cost you significantly more in the long run. A personal loan calculator can help you compare the total amount you’ll repay under different scenarios.

Banks typically look at your debt-to-income ratio when assessing loan applications. Even if a personal loan calculator shows you can afford the monthly repayments, consider how the loan will affect your overall financial health. A good rule of thumb is to keep your total debt payments (including the new loan) below 40% of your monthly income.

Some loans in Singapore offer the option to make extra payments or pay off the loan early without penalties. While a personal loan calculator might not factor this in, keep it in mind as a potential way to save on interest in the long run.

You should feel pretty confident in your ability to use a personal loan calculator like a pro at this point. Remember, though, that a personal loan calculator is just that – a calculator. This means it is a fantastic tool for getting a ballpark figure and comparing different loan options but it’s not the end-all of your loan decision-making process.

Use it as a starting point. However, don’t forget to consider your overall financial situation such as your future plans. Whatever you want to use your personal loan for, a calculator will be your sidekick.

Thankfully, you don’t have to make a lot of effort to look for a reliable one. Lender SG has a topnotch personal loan calculator designed to help all borrowers eliminate the guesswork in choosing a loan.