A finance calculator is a great tool for both businesses and individuals planning major purchases with finance. They can be accessed from devices with internet connection, used when and where the individual likes, at all hours and by anyone. Use of a calculator can be extremely beneficial to make buying decisions between different models, to prepare business budgets and just to get a rough idea of what that purchase price may represent in terms of loan repayments.
But for those that do not use the calculator properly and/or fully appreciate the results obtained, any loan offered received later, may come with a surprise. One of the major queries that users face in this situation is why the loan offer they are made is different from the results they worked out with the finance calculator.
Differences can arise between finance calculator estimates and loan offers due to a range of issues including use of the device and the loan application. If you’re going to proceed to make a major purchase based on repayment estimates from a calculator then you should be fully across the workings of a finance calculator.
We provide a number of loan calculators which have been structured for either personal loans or business finance purposes as indicated. Understanding how to correctly use the calculator and how to interpret and use the results obtained may better assist users when proceeding to apply for finance and make purchases.
Correct Use of a Finance Calculator
We have detailed the steps involved in the use of our finance calculators and all users are urged to read the information including the disclaimer prior to use. The operation itself includes only a few simple steps which most people can easily conduct. But the true value of this tool comes in the correct interpretation of the results calculated.
The operational steps are:-
- Type in the loan amount you want for the purchase.
- Select the number of years/months you would prefer to repay the loan.
- If not already showing on that particular calculator, enter the relevant interest rate that we are currently displaying for the goods being purchased.
- Click the calculate button.
Once these steps have been completed, a figure will be displayed. This is the estimated monthly repayments based on the data that has been entered. But it is only an estimate or a ballpark figure. The exact repayments and interest rate that may apply to your specific finance application may differ.
Offer different from calculator estimate?
We’ll now go through a number of reasons why a loan offer you are made may be different from the repayment estimate obtained by using a finance calculator.
- Change in loan amount. You may have entered say the RRP for a new car and not allowed for on road costs. You may have selected options and accessories on the goods being purchased which has increased the amount required for the loan.
- Different loan term. The loan term approved by the lender based on the application may be different from the term entered into the calculator. Longer terms can result in higher repayments and shorter terms in lower repayments.
- Used the wrong interest rate. Interest rates vary across different lending markets. Jade Finance provides finance for cars, caravans, motorbikes, boats, trucks, business equipment and commercial loans. The rates differ for these loan categories. You may have inadvertently entered the wrong interest rate or used the calculator set up with the rate for different goods.
- Credit profile doesn’t meet eligibility for that lowest interest rate. The rates advertised by lenders are for good credit profile applicants. If your credit score is less than good, you may not be offered that lowest rate.
- Different rate offered. A different interest rate may be offered due to credit profile, used v new goods and for equipment in different industries.
- Different interest rate applies to the goods being purchased. Used goods may attract a higher interest rate than the best rate being advertised. The type of goods or equipment may also attract a different interest rate.
- Fees and charges not allowed for. The calculator does not allow for all the fees and charges that may be applied by different lenders. These vary from lender to lender. Allow a contingency, possibly in the loan amount entered, to cover any variations.
- Interest rates have changed. The RBA has increased interest rates in the past three months and more rate rises are set for the months ahead. Some lenders increase their rates ahead of RBA decisions. The rate may have changed since you used the calculator.
- Different business finance product selected. With business finance, the interest rate varies across the selection of finance products. You may have used the calculator based on the rate for one product but received a loan offer for a different product.
Pre-approved Loan is a Great Option
To avoid surprises and be in a position to proceed with confidence, consider pre-approved finance. All our loans and finance can be applied for ahead of the purchase. This will provide a set loan offer with a time frame for activation.
Contact Jade Finance 1300 000 008 for pre-approved finance and set repayment amounts
DISCLAIMER: NO LIABILITY IS ACCEPTED IF ERRORS OR MISREPRESENTATIONS ARE FOUND IN THIS ARTICLE. THE ARTICLE IS PREPARED AND PRESENTED FOR GENERAL INFORMATIVE PURPOSES AND IS NOT INTENDED TO BE THE SOLE SOURCE OF INFORMATION FOR MAKING FINANCIAL DECISIONS. THOSE REQUIRING GUIDANCE AND ADVICE SHOULD CONSULT A FINANCIAL ADVISOR.