Can you recommend a loan calculator?

Personal Finance · 30 Dec 2020

A personal loan calculator is a handy tool to help you plan a loan application and start preparing a budget for your future repayments.

A personal loan calculator is a handy tool to help you plan a loan application and start preparing a budget for your future repayments.

On the Harmoney website, we offer a free personal loan calculator to help you get started towards your goals – whether that's organising your dream wedding, renovating your house or starting your own business.

Our calculator is easy to use. You'll just be asked a few questions to get an idea of your situation, then it can give you instant answers so you can make quick comparisons. You'll be able to see what your likely monthly repayments would be for a three-year or five-year loan and see the total cost of borrowing through Harmoney.

However, it's important to note that online calculators like these are only a general guide, as without your personal information, they can't give a fully informed overview.

Total amount borrowed

Before we can tell you how much your loan repayments will be, you need to tell us how much you want to borrow.

On Harmoney, it's possible to get loans between $2,000 and $70,000.

Not all applicants are eligible for loans up to $2,000, however. When you submit your official application, your financial situation will be assessed and you'll be given a risk grade. This will determine your interest rate and how much you can apply for.

Credit history rating

Part of the assessment when you apply for a loan is a check of your credit history. The better your credit rating, the better the interest rate you'll be offered and the more you'll be eligible to borrow.

When you apply for your loan on Harmoney, we'll ask to see information such as your bank slips. However, for our loan calculator, we just want to know if your credit history is great, very good, good or average.

Choosing the option that applies to you will determine your likely interest rate, repayments and total cost of borrowing.

Looking to get a better deal on a loan? Learn nine ways to improve your credit score.

The results

Once you enter the amount you want to borrow and your credit history into our free loan calculator, you'll be shown estimations for three factors: your monthly repayments, the total cost of borrowing and the total repayments you'll have to make.

On Harmoney, we offer three-year and five-year loan terms. The ideal length of a loan varies from person to person, but as a general rule, you'll pay larger monthly repayments on a shorter loan term, but you could end up paying less interest and less money overall because the loan will be paid off quicker.

How we calculate interest rates

The interest rate we calculate for you will be based on the information you provide in your application (such as bank statements and details of assets, such as houses). Each applicant is given a 'risk grade' that determines how much you'll have to pay in interest.

For our loan calculator, we have personalised interest rates from 5.76% p.a..

As well as interest, every applicant has to pay a one-off establishment fee. This costs $275 for loans up to $5,000, or $575 for bigger loans.

How to reduce your monthly payments

If the numbers you're being given don't fit with your budget, there are a few things you can try to bring the numbers down:

  • Look at getting a five-year loan rather than a three-year loan. This helps to reduce your monthly repayments (although you may end up paying more in interest in the long term).

  • Borrow less money. Smaller loans require smaller repayments overall. Are there any changes you can make to your plans to lower the costs?

  • Improve your credit rating. The interest you're charged on your payments could be reduced drastically if you have a stronger credit rating. Re-learn the basics about credit scores, make some positive changes to your borrowing and spending habits, and make your application when you're in a stronger financial position.

Other articles you might like:

The best ways to fund your renovation

Learning to love your budget

Spring clean your finances

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