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Boat Loan Calculator

If you’re looking for a boat loan calculator, there are a lot of websites out there who are more than willing to offer you an estimate. When you’re thinking of buying a boat, it can be a little confusing looking at all the different financing options out there. Does it really make a difference who finances the boat? Of course your lender will affect the loan you get for your boat; you want to make the right decision when that much money is involved. So what options are there?

A bank is usually the first place people think of when they want to get a loan. “But do banks really loan out money for boats? I thought banks just loaned money for homes and businesses!” Most banks are willing to lend money for boats, provided you have good credit. And the great advantage of using a bank is that they’re local, and you know you aren’t going to be swindled out of your money by some scam company.

Credit unions can also be a valuable option when looking for a boat loan calculator. Comparing credit unions against other loans, you may be able to get a better deal with a credit union – provided you’re a member. Credit unions will usually be willing to give good discounts and special deals to members, so if you’ve already got a membership with a credit union, make sure to include them in your quotes. It could save you a lot of money, simply by considering the financial options you already have.

There are other lenders, of course. Banks and credit unions don’t rule the financial world. There are many outside lenders who specialize in boat loans and other marine finances. These financial companies are good options to look at for boat loans, because they’re well acquainted with the marine business. They’ll know just how much your boat is worth, how much you should be paying, and how you can keep your payments at a minimum.

For the same reason, you might want to consider financing with your local boat dealer. The salesman who sells you the boat is going to be a much better boat loan calculator than any website application, because that salesman knows exactly how much you’re spending on the boat, and you’ve been working with him or her the entire time. And since the boat sale relies on a good boat loan, your dealer will be more willing to get you a good rate, because they know they’ll only sell the boat if you can afford to buy it.

By: Eli Adams

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Posted in Finance · August 30th, 2010 · Comments (0)

Loan Amortization Explained

When you take out a loan you will usually sit down with your provider and figure out what is called a loan amortization schedule. A loan amortization schedule will help provide a timetable for paying the interest and principle on your loan. Amortization will also help you decipher how much your monthly payments will be during the term of your and give you a look at the bigger picture of exactly how much your loan will cost you including interest. To calculate Amortization you will need your interest rate, loan amount (principle), and your term.

Any time that you take out a loan you will be charged interest for the amount you have chosen to borrow. This interest is usually shown as an annual percentage rate calculated by your lender. In a sense your lender is investing in whatever you are using your loan to fund, and so expects a return on that investment in the form of interest. Your interest rate can be affected by a host of different things. Lenders can take into account your credit and payment history, debt to income ratio, employment history, size of down payment, and the amount of money you plan to borrow into calculating your rate. Taking care of your credit and being smart with your finances can really help insure that you qualify for the lowest interest rate possible.

The next thing to consider in your loan amortization is the principle amount of your loan. Your principle is the exact amount of money that you plan to borrow without the interest taken into account. You should never borrow more than you can afford especially considering that the higher the principle, the longer it will take to pay off your loan, and the more interest that will accrue on your balance.

The final piece to consider when looking at loan amortization is your repayment terms. This tells you how long you will have to pay back the debt to your lender. The longer the term you choose to pay your loan over, the longer your loan will be collecting interest. This means that even though spreading your payments over a longer period of time may lower your monthly payments, you will also be paying substantially more on your loan in the form of interest. Interest can add up quite quickly so it’s important to balance your interest rate with your terms.

Using your principle, interest, and loan term you can then calculate exactly how much your monthly payment will be each month. This is why it’s so important to understand the amortization process since your amortization will give you the big picture of the life of your loan. Amortization will help you see how paying larger monthly payments can help pay off your principle balance quicker, meaning that you will also pay less interest in the term of your loan. It can also help you determine whether you truly can afford the monthly payments of your loan. Understanding loan amortization truly will save you a lot of money when you take it into account while calculating your monthly payments.

By: John Parks

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Posted in Finance · June 5th, 2008 · Comments (0)

Home Loan Basics

If you’re getting ready to apply for your first home loan, you’re going to need to understand the home loan basics.

When you go to apply for a home loan, you need to understand the terminology. Let’s start with the most basic of terms.

1. Principal – The principal is simply the amount you borrow to move into the home of your desires. If you apply for a loan of $250,000, the amount the bank actually gives you is the principal amount.

2. Interest – Every home loan comes with an interest rate. The interest rate is the amount a lender is charging you to borrow the principal. Interest rates are typically the key to a loan as there are a wide variety of loans that have flexible interest rates that change every year, ever few years or simply remain set over time. In general, you want to minimize the interest rate as much as possible.

3. Term – The term of the loan is simply the number of months you have to repay the money you’ve borrowed from the lender. For instance, a 30-year fixed rate mortgage is indicative of a term of 360 monthly payments to be made over 30 years. Don’t worry, there are loans of much shorter periods of time.

Amortization

Amortization is not only a mouthful, it is the one term that may confuse you during the loan process. First time home buyers often mistakenly assume the same amount of interest and principal will be reduced in each loan payment. Unfortunately, lending institutions are not willing to go about it this way, which leads us to amortization.

With amortization, lenders typically apply many of the initial payments on your mortgage almost entirely to the interest owed on the loan. If your loan calls for monthly payments of $1,000, the first payment may have $900 applied to interest and only $100 applied to the principal. As the months pass, the amount paid on the principal will increase. Yes, it is maddening.

By: Sergio Haros

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Posted in Real Estate · April 18th, 2008 · Comments (0)

Help Me Understand Loan Amortization

The term ‘amortization’ shares its origin with the word ‘mortgage.’ Both come from the Latin root, ‘mort’ which means to terminate or kill. It should be every person’s goal to terminate or kill the balance on his or her home loan (mortgage); in order to accomplish this, a portion of each payment must go towards paying down the principal. Because the lenders charge interest, a portion of each payment also must go to them. In this article, I hope to help you better understand loan amortization.

Basically, loan payments are calculated by dividing the principal balance by the number of payments. Interest charges must also be added in to each payment, and therefore only a portion of each payment will apply to the principal. Each month the balance on the loan will decrease slightly. Because interest charges are a percentage of the balance, they also decrease each month. The payment amount remains constant, so it only makes sense that as more payments are made, a larger portion of each payment will apply to the principal. Amortization is this process of determining the payment so that a portion of each payment applies to the principal and a portion to interest charges.

There are a few types of loan programs that each amortizes a bit differently. There are adjustable rate mortgages (ARMs), fixed rate mortgages (FRMs), interest only loans (IO), and negatively amortizing loans to name a few.

An ARM is a loan with an interest rate that is fixed for a certain period of time, after which it becomes adjustable. Commonly, ARMs will have a period of 2, 3, 5, 7, or 10 years for which the interest rate and payment are fixed. When the “fixed period” is over, the interest rate may adjust up or down; consequently the loan will re-amortize causing the payment to also adjust up or down. For more information on ARMs, search this directory or visit the website below for my article entitled, “What’s best for me – an ARM or Fixed?”

A FRM will amortize at the beginning of the loan and remain constant throughout the life of the loan. The interest rate on a FRM never changes (hence the name), nor does the payment.

Interest only loans operate just as they sound. These payments are not technically amortized, rather 100% of all payments will apply to paying off the interest charges before any principal is paid down. IO loans can be helpful in some instances, but can be problematic in others. You should consult with an honest and ethical mortgage professional to determine if an IO loan is right for you.

Negatively amortizing loans (such as the MTA Option ARM) are dangerous loans that can be quite confusing to the common consumer. These loans, namely the Option ARM, typically carry payment options. One option is to pay a fully amortized amount; this means that each payment will cover a portion of the principal and the interest charges. The second payment option is an interest only option. And the third payment option is a very small amount (allowing consumers to feel as though they can afford a house that they really cannot) that does not cover all of the interest charges. The amount of interest that is not covered by this payment is simply added back onto the loan balance (negative amortization). As a borrower pays with this option, they will see themselves going backwards in their loan. For more information on the Option ARM, search this directory or visit the website below for my article entitled, “I’ve been paying on my mortgage and my balance went up!?”

By: Drew Tyler

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Posted in Real Estate · December 17th, 2007 · Comments (0)

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