# Thread: Taking out a loan

1. KM Carpenter
Join Date
Feb 2003
Location
Albany, New York
Posts
2,988

## Taking out a loan

Hey all!

I need some help here.

I am going to be taking a personal loan out in the amount of \$5000.

The interest rate is about 10% and I want it for 5 years.

How much a month, aprox, is my payment going to be?

Thanks alot!

2. KM Carpenter
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Feb 2003
Location
Albany, New York
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I came up with like \$92 a month. Does that sound right?

Thanks.

3. Web Hosting Master
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Jan 2002
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Hudson, Wisconsin
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Just keep in mind that not all banks will go 5 years on only \$5000. It really depends on what you are using the money for, your collateral and your credit.

4. Web Hosting Master
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Mar 2003
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Duluth MN
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I calculate your payment to be ~\$106/mo, but it may vary depending on how often your interest is compounded.

Join Date
Feb 2004
Location
Fort Worth, TX
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I get a price of \$92.00 per month

\$5,000 on top of 10% interest of \$500.00 by 12 months gives you: \$91.66 per month. You'll pay exactly \$500.00 of interest in top of your \$5,000 loan. Its not that bad of interest.. ive seen some small loans with a lot higher interest rate.. especially for 60 months.

6. Web Hosting Master
Join Date
Nov 2002
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RealtorHost, I think your math is wrong It's 10% a year, I'm assuming? Or if its 10% total; than your math is right..

p.s.

this suonds more like a math problem

and also, how oftren is interest calculated? and is it 10% a year or total?

Join Date
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Location
Fort Worth, TX
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Hmm.. I guess the interest on my car loans are different.. its 8% on the entire amount.

\$15,000 + 8% \$1,200( \$16,700) / 60 months = \$270.00

Could be wrong for his situation.. nontheless.. still not a bad deal.

8. Retired Moderator
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Surely it's 10% per year compund interest?

\$5000 initial
\$5500
\$6050
\$6655
\$7320
\$8052 total amount payable

Averages out at \$130/month over 60months.

If it's \$500 extra only for a 5 grand loan over 5 years thats a pretty amazing rate. Having never taken out a loan myself though, other than a student loan a few years ago, I'm not 100% sure how they calculate it all!

9. Web Hosting Master
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Dec 2003
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Miami, FL
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It's \$106 a month for the next 5 years (or 60 months) w/ 10% interest.

10. Retired Moderator
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What's the calculation to get it?

Might be useful in the future!

Join Date
Feb 2004
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Fort Worth, TX
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I would say its probably best to sit back, wait and see what he actually gets. We all could be wrong.. which seems most plausable heh

12. Web Hosting Master
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Feb 2005
Location
Northern VA
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You can search Google for loan calculator. I came up with \$106.24 here:

http://www.bankrate.com/brm/popcalc2...May+19%2C+2010

\$106.24 is about right but it would vary just slightly depending on how often the interest is compounded. Some loans are compounded yearly, some monthly, and some daily. The payment amount won't vary by a great deal but the more often it is compounded the more you pay over the life of the loan.

13. Owner of the net for a day
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Jun 2002
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Waco, TX
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10% is not particularly a good rate, I am just establishing credit and got 7.9% on over a \$15,00 loan for 5 years.

14. Junior Guru Wannabe
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Jan 2002
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\$5000 - 60 months @10%
Payment should be 106.24
Total Interest Charges are: \$1,374.11

If you have a good credit rating, you should be able to shop around and get a better rate. Also, ask about repaying the loan in two week increments.

15. Web Hosting Master
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Mar 2003
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Duluth MN
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I figured \$106 for monthly payment using my financial calculator.

Texas Instruments BA II Plus Financial Calculator using Time Value of Money function.

Key, everything needs to be in the same period, since you are making *monthly* payments, everything is monthly
N = 60 (12 * 5 = 60 or the number of months for the loan)
I/Y = 0.833% (10 / 12 = 0.833 or the average interest per month)
PV = 5000 (Present value of the money you receive fom the loan)
PMT = ??? this is what we are solving for
FT = 0 (At the end of the loan, the Future Value (amount you owe) will be 0, since the loan will be paid off)

Then hit compute for PMT and it gives -106.235
When calculating like this, positive numbers is money coming into your pocket, negative numbers are money leaving your pocket. So -106.235 means you are paying the bank \$106.235 each month.

Again, it will vary depending on how often the interest is compounded. If its comounded annually, semi anually, quarterly, monthly, daily, or continuously. Most credit cards/loans are on a continuous compounding rate (meaning the interest compounds every second).

So, if it is a 10% APR (Annual Percentage Rate) compounded continuously, your EAR (Effective Annual Rate) is actually 10.517%