The loan calculator
When you want to make a loan, whether it is a consumer credit, a personal loan or a mortgage, it is necessary to take stock of your financial situation, on its borrowing capacity and obviously on the feasibility of the project. For this, many websites offer individuals a loan calculator. By typing “loan calculator” into the Google search engine, the individual will be spoiled for choice when it comes to estimating various parameters. Based on his personal information, the individual can then make estimates from his loan calculator.
Loan calculator: the criteria common to the different loans.
Whether we are talking about consumer credit or real estate credit, the individual can therefore estimate, thanks to these different loan calculators made available to him, parameters allowing him to take stock of his financial situation and better consider the project he wish to finance. In order to make it easier for him, we will take stock of each loan calculator that he may meet on the internet and on the different criteria to take into account when embarking on a loan.
Loan calculator: Debt ratio
When we talk about a loan, regardless of the nature of it, the important thing for the individual is to know if he can borrow. The first criterion to be taken into account is therefore its debt ratio before making the loan request. But what is the debt ratio? how to calculate it? Is there a loan calculator to estimate it?
The debt ratio is the percentage of the household budget which is devoted to the repayment of debts linked to loans (personal loan, revolving credit, mortgage loan etc.). In United States, although there is no law setting a maximum rate, it is generally accepted that the debt ratio should not exceed one third of the household's fixed income. Indeed, banking institutions consider that households, in order not to find themselves in a critical financial situation, should not exceed a debt ratio of more than 33%. Beyond that, the consumer risks finding himself in over-indebtedness, namely that he will no longer be able to honor his debts. At this stage, in addition to the repayment of the debts or a repurchase of credit which can alleviate the part related to the repayments of the debts, the individual will be in the obligation to exceed a file of overindebtedness with the Bank of United States. This has serious consequences because the individual will then be listed on the files of the Bank of United States. He will therefore be unable to borrow money. Indeed, one of the main conditions for taking out a loan is not to appear as a bad payer on the Bank of United States files. In order not to reach this stage, the individual can therefore use a loan calculator to define his current debt ratio and estimate the part of his budget that he can devote to the repayment of his new credit.
For this, on the internet, many organizations offer consumers a loan calculator. On most of these sites, the individual will therefore be able to simulate this rate using a loan calculator.
If the consumer wishes to use this loan calculator, he will generally have to fill in the following elements:
- His annual fixed income (where applicable those of the co-borrower),
- Other sources of income,
- Non-compressible charges after the loan (the rent is not to be taken into account in the case of calculating a debt ratio for a mortgage),
- The possible repayment of a mortgage,
- Repayments of consumer loans
- The other charges.
Following this, the loan calculator allows the individual to know his debt ratio and therefore to estimate the part of his budget that he can devote to his loan project.
Loan calculator: Calculation of "remainder to live"
The individual must also be interested in the calculation of his "remainder to live". The "remainder to live" is the part of its budget which allows it to honor fixed non-compressible charges. To know the "remainder to live", the individual can also use a loan calculator.
This calculation is quite simple. The individual must first list all his fixed income. This income can be different depending on the lending agency. Indeed, if it seems logical to take in the fixed income the fixed salaries (as indicated on the tax notices) of the individual and, where applicable, of the household, some establishments will take into account the allowances, or even family allowances if they are received throughout the duration of the loan. In addition, some establishments may take into account the benefits in kind that the individual may receive from his professional situation, for example. The 13th month as well as commissions and alimony will be counted in the amount of fixed income. On the other hand, exceptional bonuses, overtime, reimbursements of professional expenses (expenses incurred by employees), profit-sharing bonuses or participation bonuses will not be included in this amount due to their random nature. However, these gratuities not taken into account in the calculation of the salary can facilitate obtaining a loan from a banking establishment.
When the borrower is retired or in a situation of disability, these allowances are recorded in fixed income, since these are situations recognized by the State benefiting from State premiums. However, institutions can request a health check from the elderly to ensure no health concerns that could affect the loan application.
In addition, in the case of rental income, some establishments will take 70% of this income into account in the calculation of the individual's fixed income.
Secondly, the individual must list the so-called mandatory monthly charges. In these charges, the individual must take into account his rent, the monthly payments of current loans, any pensions that the individual must pay, travel expenses to get to his place of work, electricity bills, water and gas, taxes, duties, home insurance. It is important to remember that the term of incompressible loads is subjective. Indeed, it depends on the individual to determine which are the so-called optional charges of the so-called mandatory charges. Finally, the individual should not take into account the amount of his rent when it comes to a mortgage.
The loan calculator will therefore easily be able to give the part of the budget remaining for daily expenses, ie the “remainder to live”. This calculation therefore consists of a simple subtraction between the fixed income and the incompressible charges. The consumer code (article R331.10.2) has set a minimum threshold not to be exceeded. This “remainder to live” threshold is equal to the value of the RSA on January 1, 2016. This threshold is increased by 50% in the case of a couple. To date, the “remainder to live” is estimated at US $ 535.17 for a single person without children.
Loan calculator: Principal outstanding
When the individual seeks to know the amount he still has to repay on his loan, he will find on the internet a loan calculator allowing to know the capital remaining due on this credit. For this, the individual must have provided some information: the amount of the amount borrowed, the credit term, the interest rate as well as the date of the first withdrawal. If we take the example of a loan of 150,000 US dollars over 25 years, at a rate of 1.05%, the first repayment of which was made on July 1, 2010, on October 1, 2016, from a loan calculator, there remains 116,105 US dollars to be reimbursed by the individual to his banking establishment.
This type of loan calculator can be interesting for the individual who seeks to renegotiate his mortgage. Indeed, even if other criteria are taken into account such as the difference of at least 1 point between the interest rate at the time of the loan and the current interest rate, the outstanding capital must be high enough to that the negotiation be interesting for the consumer. So even if opinions are somewhat divergent, experts agree that this outstanding capital must be at least 50,000 US dollars (or even 70,000 US dollars according to some websites). Using a loan calculator therefore facilitates this type of transition.
Loan calculator: amortization table
Knowing the amount is important, but sometimes the individual may need more information on their credit status and the progress of their repayment.
When the consumer makes a loan, an amortization table is provided to him, allowing him to have information on what he will repay each month throughout the duration of his loan. Nevertheless, at a precise moment, it can be difficult for the individual to navigate between the part of the capital that he repays per month, the costs related to the interest of the loan, the insurance costs etc.
There is therefore a loan calculator allowing individuals to establish an amortization table allowing them to understand their monthly payments. On most of these sites, by entering the amount of the credit, the interest rate, the date of the first monthly payment and the duration of the loan, the individual will be able to find a summary of the amortization of his loan. For each year, he will be offered a table grouping the annuities per month as well as the part allocated to the repayment of net capital, that corresponding to the repayment of interest, as well as the remaining capital due for each month. Some sites also offer in their loan calculator to calculate the part related to insurance. The individual may therefore have the monthly portion devoted to the payment of insurance linked to his credit. Insurance for loans is not compulsory. However, in the case of a mortgage, the banking establishment may require guarantees from the individual. The latter is entitled since the Lagarde law to operate competition and to take out insurance in another credit institution.
Example of an amortization table for the first year of repayment of a mortgage of 150,000 US dollars at 1.88% over 20 years
Loan calculator: estimate of borrowing capital
The individual seeking to obtain a loan must also (and this should even be done upstream, even before defining the amount he wishes to borrow), estimate his capacity to borrow. For this he will be able to find on the internet a loan calculator allowing him to take stock of his situation.
The individual must first use a loan calculator to calculate the monthly payments that he can allocate to his future credit. From his debt ratio, his income and the "remainder to live", the individual will be able to estimate the maximum possible monthly payment for his loan. It is important to remind the consumer that the share of credits in a budget should not exceed one third of their total.
Once the individual has estimated this monthly payment, he can use a loan calculator to estimate his borrowing capacity. This calculation will take into account the duration and the interest rate of the credit. Based on the following formula, it will then be possible to estimate the total amount of the loan (all charges included):
Borrowing capacity = M (1- (1+ (r / n)) - N) / (r / n)
M: monthly payment attributable to the loan
r: loan interest rate
N: total number of annuities x number of years of credit
n: number of annuities per year (i.e. 12 in most cases)
If we take the example of a loan with an interest rate of 1.88% over a repayment period of 20 years with monthly payments of 1000 US dollars, the amount of the credit will be estimated at 199,912 US dollars. The advantage of this loan calculator is that it informs the consumer of the amount of the cost of credit. In this case, the cost of credit is estimated at 40,088 US dollars excluding fees and insurance.
Loan calculator: interest rates (APR)
Furthermore, in order to obtain the best interest rate for his credit, it is interesting for the individual to know the maximum rate of the credit that he can repay. For this based on the borrowable amount, the duration of his credit and the monthly payment that he can devote to the repayment of his credit, a loan calculator will allow him to determine the interest rate of his future credit. In addition to knowing the maximum amount of this credit, and therefore to be able to operate competition between the different banking institutions, this also allows the individual to know if the rates applied by the latter are acceptable.
This type of loan calculator is offered by many sites. Generally, the individual will be able to select "find the rate of the loan". He must then enter the capital that he can borrow, the total repayment period (in months) as well as the monthly payment that he can devote to the monthly repayment of the loan (all charges included). If we take the example of a loan in the amount of 150,000 US dollars, over a period of 300 months with a monthly repayment of 627 US dollars, the loan calculator will indicate to the individual that the interest rate of his credit is 1.88% (under the conditions specified by the individual). The loan calculator will also show the total cost of credit, in this case it will be 38,115 US dollars.
Loan calculator: calculating the term of the loan
The consumer may also have recourse to a loan calculator to obtain the duration of his credit. Thus, the consumer simply has to indicate the monthly payment of his loan, the amount of it and the annual interest rate so that the loan calculator offers him two possibilities. In the case of a loan of 200,000 US dollars, with monthly payments of 1,000 US dollars and an interest rate of 1.88%, the loan calculator will therefore offer:
- A loan over a period of 20 years with monthly payments of 1,000 US dollars and a cost excluding fees and insurance of 40,000 US dollars or a credit;
- A loan over a period of 21 years with monthly payments of 961 US dollars for a cost of credit excluding fees and insurance of 42,172 US dollars.
The choice of the credit term is important. In fact, the more the credit will be made over a long period, for an equal sum, the monthly payments will be lower but the interest rates higher. Financial institutions take more risk by lending money over a longer period. To better understand a situation where the borrower would no longer be able to honor his debts, the financial institution increases the interest rates with the duration of the credit. Thus, the longer the credit, the greater the cost thereof. The use of the loan calculator therefore makes it possible to realize this cost.
Loan calculator: case of a mortgage
When an individual or a household embarks on the purchase of a property, they need to have information on what they can borrow, the monthly payments, the interest rates, the "remainder to live." »Etc etc… Thanks to a loan calculator, they will be able to carry out simulations allowing them to have a real idea of the feasibility of their project.
Loan calculator: Calculation of monthly payments
When we think about taking out a loan, several things quickly come to mind: how much? over how long? how much per month?
If the individual has a precise idea of the amount he wishes to borrow, as is generally the case for a real estate project or even a project to purchase a vehicle, he can seek to estimate the monthly payments of this credit.
For this, the individual can use a loan calculator that he can find on the various websites devoted to this subject. The principle is quite simple, with the desired amount of credit, the loan interest rate and the repayment period, the individual can have an estimate of the monthly cost of the credit that he wishes to achieve. In addition to the informative nature, this will allow the individual to know if his project is feasible in the current state. He can compare this monthly payment to the amount he can allocate to credit according to his financial situation, his debt ratio, his borrowing capacity, his "remainder to live" ... As many possible parameters as he can calculate via a loan calculator on different sites.
Some sites provide different loan calculators including a loan calculator to estimate the monthly mortgage payments. As mentioned previously, the individual will have to enter the amount he wishes to borrow and the duration of the loan. Then, he can choose the region in which he wishes to make this loan. The interest rates of loans can indeed vary depending on the location of the property. The site will offer an average interest rate according to the current market and the duration of the credit, in the selected region (note that the individual can always enter the interest rate manually, which allows him to have an estimate closer to the reality of his project). The insurance rate will also have to be entered, by default this rate will be 0.36%.
If we take the example of a mortgage of 150,000 US dollars over a period of 25 years, the loan calculator offers an interest rate of 1.84% at the national level and therefore an insurance rate of 0.36%. The loan calculator will simulate monthly payments of 669 US dollars including 45 US dollars of insurance. The total cost of the credit will be estimated at US $ 50,749 with US $ 13,500 of insurance. The loan calculator is associated with graphics allowing the individual to know the variability of the amount of monthly payments according to the duration of the credit as well as the cost of this credit according to the duration. Once again, the loan calculator indicates that the longer the repayment period, the more the total cost of the loan will be important while the monthly payment it will decrease. The loan calculator on this site offers individuals a summary table with the duration of the loan, the average interest rate of the loan in force depending on the repayment period, the insurance rate, the amount monthly payments and the cost of credit.
Loan calculator: Notary fees
When the individual becomes the owner, he must pay the notary fees. These fees include all the taxes and / or duties that the individual must pay to several organizations. Currently, notary fees are estimated at 8% of the selling price of an old property (or land) and 2/3% of that of a new property. It is therefore important that the individual takes into account his costs in the calculation of his loan. For this, the individual can find a loan calculator on the internet for estimating this cost.
If we take the example of the acquisition of a new property with a value of 150,000 US dollars, the individual will have to pay in addition 4,534 US dollars in notary fees broken down as follows:
- 1952 US dollars for fees (notary tax included)
- 1223 US dollars in duties and taxes
- 1360 US dollars for formalities and disbursements (variable amount)
The calculation of emoluments (notary fees) is done according to different installments. They are proportional to the selling price of the property. The table below details the emoluments according to the example taken previously (namely the purchase of a new property at 150,000 US dollars with 1952 US dollars in fees for the notary).
From 0 to 6500 US dollars
256 US dollars
From 6,500 to 17,000 US dollars
171 US dollars
From 17,000 to 60,000 US dollars
467 US dollars
Above 60,000 US dollars
733 US dollars
1623 US dollars
325 US dollars
1952 US dollars
When the individual uses a loan calculator on the internet, he will be able to see that for the same loan amount, the part linked to the notary's emoluments does not vary if he acquires a new, old or land property. On the other hand, the share of taxes and duties can vary greatly. In the case of a new property, the loan calculator will indicate the sum of 1223 US dollars including:
- Land registration tax: 0.715% therefore 1073 US dollars
- Contribution to real estate security: 0.100% or 150 US dollars
In the case of an old property or the purchase of land, the costs are distributed differently. The loan calculator will therefore give:
- Departmental registration fee 4.500% or 6750 US dollars
- Municipal tax 1.200% or 1800 US dollars
- Base charge 0.090% or 135 US dollars
- Contribution to real estate security: 0.100% or 150 US dollars
It is important for the individual to know that the departmental registration fee may vary depending on the department in which he is acquiring. He should therefore be wary of loan calculators on the internet. While the majority of departments apply a tax of 4.5%, this is not the case for the departments of Indre, Isère, Morbihan, Martinique and Mayotte which apply a tax of 3.8%. The Côte d'Or applies a departmental tax of 4.45%. The base costs amount to 2.50% of the departmental tax, or approximately 0.09%. These fees represent the taxes that the state levies on a real estate transaction.
Loan calculator: PTZ calculation
Still in the case of a mortgage, the State offers him the possibility of financing part of his project with a zero-rate loan (the famous PTZ), when it comes to a first-time accession. However, to obtain a 0 rate loan, you must meet certain financial, family or even geographic criteria. In fact, the PTZ is dependent on the income of individuals and takes into account all the fixed income of people who will live in the future accommodation. The lower the household income, the more interesting the PTZ will be: maximum amount and duration knowing that the duration of a PTZ is 20 to 25 years with a deferral period of 5 to 15 years during which the individual does not reimburse anything. As said previously, the PTZ is not a credit allowing the purchase of the entire property, it comes in addition to another contribution (whether linked to a credit or linked to personal financing). Finally, the PTZ allows the acquisition of a new property or an old property when the amount of work engaged in the renovation is equal to at least 25% of the totality of the project.
In short, the multitude of criteria to be fulfilled does not make things easy for individuals. The State has therefore set up a loan calculator on the site www.logement.gouv.fr allowing individuals to know if they are eligible for the PTZ.
On this loan calculator, the individual must first inform whether he has been an owner during the past two years. Indeed the PTZ is reserved for the first time accession, if the individual has been or is the owner, the PTZ will be refused (the individual will be quickly informed of this conclusion). The total cost of the operation, the amount of the personal contribution, the number of people present in the accommodation, the amount of income of all these people, the region, the department, the municipality of the future accommodation and finally the seniority of the future housing (new or to be renovated) are the other criteria to be informed on the loan calculator. Once he has fulfilled all the criteria, the individual will be informed on a new page of his eligibility or not.
The State would like to point out on the loan calculator website that these simulations are information that is not of a contractual nature.
Loan calculator: deductible interest
When the individual has taken out a mortgage, he can deduct a share of the interest from these taxes. However, it is difficult to navigate the calculations to be made to know the exact amounts to deduct. The loan calculator are therefore available to facilitate the task for the individual. The pap.fr site offers this type of loan calculator. The individual will only have to enter the amount of his loan, his interest rate, the date of subscription of the credit, the duration, his family situation, his personal situation, the number of dependent children and finally the quality of housing. Indeed, the deductible charges will be different if it is an old housing, a new housing or a BBC housing, that is to say a housing classified "low consumption building". However, in order for the individual to be able to deduct a portion of his interest on his taxes, the mortgage must have been taken out before December 31, 2010 or in the case of a construction, by September 30, 2011 (deadline for opening from site to construction).
If we therefore take the example of a household without children who took out a loan of 200,000 US dollars, at a rate of 1.88 taken out in January 2010 over a period of 20 years, in the case of old housing the sum total deductible will be 410.48 US dollars spread over 6 years.
Table of the distribution of deductible sums in the case of old housing for a loan of 200,000 US dollars over 20 years (household without children, interest rate of 1.88%)
In the case of new housing, the sum will be spread over 5 years and the total amount of the deductible part will be 307.86 euros.
Table of the distribution of deductible sums in the case of new housing for a loan of US $ 200,000 over 20 years (household without children, interest rate of 1.88%)
Finally in the case of housing classified BBC, the sum will be more substantial since in this case it will be 896.06 US dollars, spread over 8 years.
Table of the distribution of deductible sums in the case of a new “BBC” housing for a loan of 200,000 US dollars over 20 years (household without children, interest rate of 1.88%)
Case of other credits
Loan calculator: the personal loan
Different from the assigned credit, the personal loan is a credit granted by a financial institution to an individual without having to provide proof of the use of funds.
On the internet, there are many organizations offering personal loans with the possibility of carrying out a simulation with a loan calculator. After having estimated the budget necessary for the realization of his project as well as these repayment capacities using other loan calculators such as loan calculator of borrowing capacity and debt ratio loan calculator, the consumer will be able to make different estimates using loan calculators for consumer credit in order to obtain several simulations. Once again, it is important to remember that a loan calculator only gives a simulation that has no contractual character. It only allows you to better manage your budget, the consequences of your loan and finally to better manage your file. Better management of your file is an important point when negotiating your credit. Indeed, with a perfect knowledge of the possibilities available to you, the repayment capacities available to you to finance this credit, etc., you will be more likely to benefit from a better offer. If, on the contrary, you do not know your file well, have not carried out any simulation and only depend on the lender, there is more chance that the offer of consumer credit will be less advantageous.
Loan calculators on the internet are always accompanied by examples of already pre-established offers, which gives an overall idea of the products offered by the funding organization.
Certains sites proposent aux consommateurs des calculettes de prêt assez simples. Ils offrent de nombreuses possibilités au consommateur. Par exemple, sur un premier site, en choisissant le montant qu'il souhaite emprunter, puis en choisissant s'il souhaite ou non souscrire à l'assurance, la calculette de prêt proposera bien souvent au consommateur 6 possibilités de crédit. La calculette de prêt propose en effet 6 mensualités différentes pour 6 durées de remboursement différentes. En choisissant l'une ou l'autre des propositions, la calculette de prêt fera un récapitulatif de la simulation en indiquant au consommateur le montant du crédit auquel il ajoute la part liée aux intérêts. Les mensualités, le TAEG fixe, le cas échéant le coût de l'assurance et la durée du crédit sont aussi proposées par la calculette de prêt.
D'autres sites proposent des calculettes de prêt plus précises. Sur ce second type de site, la calculette de prêt proposera donc au consommateur de choisir le type de projet, le montant qu'il souhaite emprunter mais aussi, cette calculette de prêt propose au consommateur des durées de crédit et des TAEG fixes variables. En effet, la calculette de prêt est munie de deux barres déroulantes: une barre permettant au consommateur de choisir la durée du prêt qu'il souhaite (de 12 à 120 mois) et une barre lui permettant de modifier le TAEG fixe du crédit. Les outils de cette calculette de prêt permettent au consommateur d'avoir une estimation plus précise du prêt qu'il souhaite.
Les autres calculettes de prêt
Sur internet le consommateur pourra constater qu'il existe une multitude de calculettes de prêt lui permettant de réaliser des simulations de tout. Lors d'un crédit à la consommation pour une auto, en plus de ce qui est demandé pour un prêt personnel, les calculettes de prêt demanderont au consommateur de rembourser le type de véhicule qu'il souhaite acquérir, à savoir si le véhicule à plus ou moins de 2 ans (un véhicule de moins de 2 ans dispose des mêmes garanties qu'un véhicule neuf).
Lors d'un rachat de crédit par exemple, le consommateur pourra s'il le souhaite effectuer des simulations via une calculette de prêt. La calculette de prêt est assez complètes dans le sens où elles vont demander un maximum d'information au consommateur afin de bien évoluer le rachat de ses crédits. Dans le cas de ce site, la calculette de prêt demandera au consommateur de renseigner le nombre de crédit immobilier ainsi que le nombre d'autres crédits qu'il possède, le montant total dû, les mensualités de ces derniers, le montant des autres dettes éventuelles, le montant d'un éventuel besoin de trésorerie ainsi que les ressources mensuelles du foyer. Après avoir renseigner ses informations personnelles, le consommateur pourra avoir une simulation via cette calculette de prêt d'un éventuel rachat de crédits.
La calculette de prêt en bref…
La calculette de prêt est donc un outil indispensable pour le consommateur qui souhaite effectuer un crédit. En effet, la calculette de prêt donne la possibilité aux consommateurs d'estimer une multitude de paramètres leur facilitant les démarches mais aussi permettant d'évaluer la faisabilité de leur projet. Outre la calculette de prêt classique pour les crédits à la consommation ou encore les crédits immobiliers, le particulier pourra donc trouver une calculette de prêt pour estimer le montant de son «reste à vivre», une calculette de prêt pour calculer sa capacité d'emprunt, une calculette de prêt pour calculer la durée de l'emprunt mais aussi des calculettes de prêt plus spécifiques comme la calculette de prêt permettant d'estimer les frais de notaire (dont le coût lors d'un transaction immobilière n'est pas négligeable) ou encore la calculette de prêt pour les frais déductibles des impôts (dans le cas de l'achat d'un bien immobilier). L'utilisation d'une calculette de prêt est de plus très simple. En effet, généralement, les informations demandées par les calculettes de prêt sont faciles d'accès pour le consommateur. Cependant, parfois, la recherche de ses informations peut être fastidieuses, comme lors d'un calcul de «reste à vivre» où le consommateur doit lister toutes ses dépenses non compressibles.
Il est cependant important de rappeler que ces calculettes de prêt ont un caractère informatif. En effet, les estimations sorties des calculettes de prêt ne sont pas contractuelles. Certes ces calculettes de prêt donnent des informations importantes au consommateur, il n'en est pas moins qu'il devra se rendre dans un établissement financeur ou faire une demande sur un site internet afin d'obtenir une offre recevable.
Ces calculettes de prêt représentent un véritable avantage pour le consommateur. Elles lui permettent, tout d'abord, de mieux préparer sa demande d'emprunt, mais lui permettent également de mieux gérer les conditions de cet emprunt. En effet, les différentes simulations et les différentes possibilités qu'elles offrent, vous permettront d'être conscient des répercussions de votre emprunt et de choisir la situation qui vous est la plus adaptée. Par exemple, est-il préférable pour vous de financer un crédit plus longtemps (et donc plus cher), mais de régler de plus petites mensualités chaque mois? Ou est-il au contraire préférable pour vous de régler votre crédit le plus rapidement possible afin qu'il soit moins coûteux? Une calculette vous aidera à réfléchir à toutes ces questions. Tout en réfléchissant aux différents aspects de votre crédit, vous vous préparerez également mieux pour la négociation de votre emprunt et les différentes opportunités qui s'offrent à vous.