Do you want to perform a loan simulation, or are you curious about the benefits that this has to offer? You can easily do a simulation online, so you know exactly where you stand. Determine on the basis of the amount you wish to borrow, the term and the Annual Cost Percentage what you spend on the loan each month. Do you want to know how much you will pay during the first year? That is also something you can easily find out with the loan simulation.
Amount borrowed and duration
As soon as you perform a loan simulation it is in any case important to enter the amount that you want to borrow. For example, do you want to purchase a car of $ 10,000 and do you also have some savings available? Then it is a good idea to first enter the full amount in the loan simulation. Find out what it costs to borrow this amount. Are the costs higher than you thought? Then you assume, for example, $ 8,000 in the loan simulation, so that you can also contribute $ 2,000 in savings.
In addition, the duration is also important within the loan simulation. Keep in mind that a longer duration will lower the monthly costs (the monthly payment will be lower), but that the total costs will ultimately be higher (you pay interest over a longer period).
Annual Cost Percentage
Do you want to get a good idea of the interest you pay per year? Then also enter the Annual Cost Percentage, as stated in the offer from the bank or lender. In this way you can enter the various elements of the loan simulation, so that you get a good picture of the costs that the borrowing money will entail.
Do you want to compare loans? Then it is wise to perform a loan simulation in any case. In this way you can check, among other things, what it is if you contribute more of your own money. In addition, you can easily find out what it costs if you would, for example, pay 1% more interest per year, or what it would save if the duration turned out to be shorter. Try different loans so that you can choose the terms and conditions for the loan that match the financial picture you have in mind.