## What is a consumer loan calculator?

A consumer loan calculator is a calculation tool that allows you to make online credit simulations. This type of tool can be found on online bank loan comparators but also directly on credit institution sites.

A consumer loan calculator provides visibility into the borrowing possibilities and repayment terms of a consumer loan. It also makes it possible to compare the different offers of the market. It is true that the consumer credit market is a so-called hypercompetitive market, it is therefore strongly advised to inquire about several offers before subscribing to a credit. The consumer loan calculator just happens to be the perfect tool to do it.

As a first step, you should know that there are several types of consumer credit. The 2 most common offers are:

- The personal loan: It is a loan ranging from 200 € to 75 000 € and whose repayment duration must be between 3 months and 7 years. Its particularity lies in the fact that it is not dependent on any particular purchase: The user can spend the amount borrowed as he sees fit. This loan is the consumer credit most used by the French.
- The appropriated credit: The borrowed amount and the repayment period of the credit allocated depend on the same conditions as the personal loan. The particularity of this loan lies in the fact that it is dependent on the purchase of a specific property. This condition makes this loan a tighter but more secure loan. It is very often offered by signs, for example, household appliances or automobiles that will offer you to pay your purchase in several times.

## What can be calculated with a consumer loan calculator?

Thanks to a loan calculator, you will be able to glimpse all the specific conditions related to the credit offer to which you wish to subscribe. The tool therefore makes it possible to calculate:

- Borrowing amount: This is the borrowing capacity of the claimant. This amount is determined by the monthly installments that the loan recipient can afford, the desired repayment term, and also the interest rate.

Example: A person who can afford to pay monthly installments of 300 € for a period of 3 years, if interest is 1.75%, can borrow the sum of 10 635 €.

Monthly payments: This is the amount that the beneficiary will have to repay each month. It is generally recommended that you determine the amount of monthly payments that you can afford before applying for credit. Here, the calculator can give you an idea of your monthly payments depending on the amount of the loan and the duration of the repayment, as well as the interest rate.

Example: A loan of € 5,000 with an interest rate of 2% and a repayment term of 2 years will result in monthly payments of € 212.7.

The repayment period: This is the time you will repay the amount borrowed, as well as interest, according to your monthly payments and the interest rate.

Example: For a loan of € 8,000, whose interest rate is 1.60% and whose monthly payments are € 350 per month, the loan repayment period will be 23 months, or almost 2 years.

APR (annual percentage rate of charge): This is the interest rate set by the bank or credit institution. It makes it possible to evaluate the real cost of the credit. This makes him the real comparator when applying for a loan. The lower the interest rate, the more interesting the credit will be.

In no case can the APR be greater than the rate of wear. This is the maximum legal rate imposed by the Banque de France. For example, in the first quarter of 2017, the usury rate is set at 6.65% for consumer loans above € 6,000.

Credit institutions are required to include the interest rate of an offer in their advertisements, credit offers, and credit agreements.

For information, the APR includes the basic interest rate, the filing fees and commissions related to the implementation of the credit as well as any insurance premium. Notary fees are not included in the interest rate.

Attention interest rates may vary depending on credit institutions.

Example: For a loan of € 5,000, if your monthly payments are € 195 spread over 26 months, this means that the TEAG is 1.25% (and therefore the interest of € 70). In comparison, if this same loan is reimbursed with monthly payments of € 200 over 26 months, then the TEAG will be 3.57% (and therefore the interest of € 200).

Interest, the cost of the loan: They depend directly on the amount of the loan and the interest rate.

Example: For a loan of 4 000 € with an interest rate of 2%, interest will be 80 €. It is therefore considered that the requested loan will have a cost of 80 €.

Notary fees: Since they are not included in the APR, some sites offer notary fees calculators.

Example: For an assigned credit, if you want to buy a new property (or less than 5 years) worth € 1,000, you can assess the notary fees to € 56. top