# Loan Amount Calculator - Determine Loan Amount to Apply for one

Seeking or taking financial aid like a loan for any urgent matter, education, house, or any other reason is one of the most secure solutions. Furthermore, based on your eligibility, you can get a loan of a good amount and low-interest rates. The idea of taking a loan might make it look simple, but it is not. Have you ever wondered how much debt you can handle or do you have enough resources in the long term to repay the loan?

Before applying for a loan, estimating that you are ready for it and can repay it without any hassle is best. Now, how to do that, you might ask. You can calculate your potential monthly payment with our streamlined loan amount calculator.

A Loan Amount Calculator is similar to a loan EMI calculator, where you enter the principal sum, the interest rate, and the loan tenure into the calculator. After that, it computes the EMIs for you. Knowing that EMI, you can determine if you can take a debt of any specific amount.

In this writing, we’ll discover more about the same. Stay tuned to learn more. Here at freeemicalculator.in, you can use several loan-specific EMI calculators to evaluate the EMIs quickly.

## How do you Calculate a Loan Amount?

The loan payment calculator uses the interest rate you enter and breaks down your principal balance every month. Following that, you can get an amortized schedule of your loan. You can estimate the amount using online calculators and get an amortized schedule.

Amortization refers to the process of repaying a debt on a regular, set schedule. During the initial few years of the repayment, interest is likely to make up the majority of your EMIs. For instance, if your monthly auto loan payment is ₹5000, your initial payment might be split into ₹1500 for principal and ₹3500 for interest.

### Types of Loans

Now that you know how you can determine the amount of loan that you can afford. Let’s look at the types of loans that you can apply for based on your requirements.

• Auto Loans

Auto loans or car loans are a service to assist the borrower in financing a car. With vehicle loans, you can borrow a large sum and repay it over a predetermined length of time with interest, just like with every other loan. Furthermore, auto loans are secured loans, which means that the car you are taking a loan is collateral or security. The lack of timely monthly payments increases the risk of losing your vehicle.

• Personal Loans

Applying for personal loans from a bank, credit union, or online lender for just about any purpose is one easy way to borrow money. Furthermore, these are unsecured loans with no security for the lender. The interest rates and conditions of these loans are set. By optimizing the personal loan EMI calculator, you can compare the top lenders and banks to get the most lucrative deal.

• Home Loans

Loans secured by the value of your property are known as home loans. Your home is used as security for these loans. Furthermore, they often provide better interest rates and conditions compared to other loan products. By deducting your mortgage balance from the house’s current market value, you may determine your equity. Home loans and home equity lines of credit are the two categories of home equity products. Make sure to examine rates and terms before selecting a home loan emi calculator.

• Education or Student Loans

Loans made exclusively for educational reasons are known as student loans. Additionally, you can apply for federal or private student loans as per your requirement. Compare terms and interest rates on student loans before selecting a lender, bank, or HFC.

#### Secured vs. Unsecured loans

The financial services we discussed above come in secured and unsecured options. Secured loans, in a simple sense, are loans that require the borrower to put up an asset as collateral or security. Furthermore, the most prominent example of this is a house or car. Such loans involve a hanging risk since you could lose your asset if you fail to pay them back. The advantage of these loans is the low-interest rates as the lender is taking on some risk. Additionally, the borrower can get better terms overall.

By virtue of the name, you can assume that an unsecured loan does not require collateral, making it a safer option. Furthermore, you can qualify for the best interest rates if you have good credit. These loans tend to have limitations on borrowing requirements, lower borrowing limits, and higher interest rates. The examples of unsecured loans are personal loans and student loans.

##### Loan Basics

A loan is a simple term that one can define as debt taken for a duration of time and will be repaid with a set interest on that loan amount. Therefore, understanding the elements that comprise a loan is essential. Look at the following points to learn more:

• Principal

The total sum of the amount borrowed is known as the principle. This money is often given to you in one big sum, on which you must make monthly repayment payments.

• Interest

The rate at which the amount owed grows is known as the interest rate. Furthermore, it includes any costs levied by the lender and is often represented as an annual percentage rate (APR).

• Term

The tenure of time you have to repay your loan is known as the loan term. Your monthly payments will be cheaper as your loan’s term lengthens. This is generally computed in months or years.