Getting yourself a new ride? Don’t make a purchase so quickly. Just when you thought you’re ready to buy a car, think again. You can’t be totally prepared for a car purchase without using an auto loan calculator. Read on to learn more about this simple but amazing tool.
What are Auto Loan Calculators?
An auto loan calculator is a piece of software embedded into a website that usually computes the final cost and monthly payment of an auto loan. It is offered FREE by banks, lenders, financial service providers, and the like in their websites.
Types of Auto Loan Calculators
Monthly Payment Calculator: In order to have an estimate of the monthly payment you’ll most likely shoulder for a car, you need to key in the car price, down payment, interest rate and loan term to the calculator. The estimated monthly payment can be used to determine how much car you can afford. Some Monthly Payment Calculators provide a printable amortization schedule.
Auto Loan Payoff Calculator: Are you planning on completing your auto loan payments ahead of time? Before you act, consult an Auto Loan Payoff Calculator first. This calculator will tell you whether or not you should pay your auto loan off early. Either decision has something to do with saving and losing money. The calculator usually asks for the loan term, number of months remaining in your current loan, auto loan amount, annual interest rate, and monthly payment.
Buy vs. Lease Calculator: One of the many choices you would have to make as a car shopper has something to do with the financing part of the purchase. Which is better: borrowing money for the car or leasing it? A Buy vs. Lease Calculator can help you make a decision. In several websites like Bankrate.com, the calculator asks for an estimated amount of the down payment you can make, car price, monthly payment/lease, and the length of the loan/lease, among others. Buy vs. Lease Calculators compare the two options for you and tell you which is better cost-wise.
How They Help
Before finally purchasing a car, you need to consult an auto loan calculator first. Here are some ways by which it can benefit you:
- Auto loan calculators are great time savers. Without them, it is terribly difficult to come up with an estimate of how much car you can afford or the loan amount you can get approved for.
- Auto loan calculators are also great money savers. They show you the numbers and aid you in coming up with a good financial plan on big-ticket purchases such as a car. Knowing the figures helps you make a decision. It also prevents you from overpaying or agreeing to a deal you can’t really afford.
- Aside from saving money, auto loan calculators also help you find the best deal. Car shoppers are always advised to compare three or more auto financing offers before making a decision. But comparison shopping involves some math, something that intimidates most shoppers. Good thing auto loan calculators can take care of the math for you.
Why are Auto Loan Calculators Important?
The numbers auto loan calculators reveal are more important than the numbers you’d see in auto loan quotes. Many times, quotes are sugarcoated. They make a car financing offer appear affordable and reasonable. But an auto loan calculator can tell you whether an offer is actually abusive or indeed competitive. Unfortunately, many borrowers do not look beyond the monthly payments.
Knowing the right amount to pay and being able to choose the best deal available are two important things you can accomplish with the help of an auto loan calculator. If you are trying to rebuild your credit through an auto loan, you shouldn’t take for granted the huge role auto loan calculators play in the car-buying process.