# Financial Calculators – How Are They Helpful?

When it comes to calculation of loans and mortgages, there is a special calculator, known as the “Financial Calculator“. This is a simple device that is built purely for the calculation of financial matters, such as interest rate, loan rates, mortgage rates and so on. The calculator has built in formulas and thus makes it easy to calculate financial rates.

Apart from being a physical device, a financial calculator is also a small programmed tool, posted on financial websites, for people to calculate their rates instantly. A typical financial calculator could cost somewhere around $35, and if you happen to be in a finance industry, this is a much needed device.

There are three basic types of financial calculators; **Loan** calculators, mortgage calculators and credit card calculators. Let’s describe each one of them respectively.

**Loan Calculators**

A loan calculator enables users to understand the payable amount of a loan, along with the specified interest rate. The loan calculator works on particular variables and helps you decide what the monthly principal and interest payment would be. There are three types of information used in a loan calculator:

(a) The actual loan amount

(b) Estimated repayment time

(c) Estimated interest rate.

You could either use a physical calculator or simply go online and use an online based loan calculator.

A mortgage branches out to two major types; fixed rate and adjustable rate mortgages. Fixed rate mortgage calculator requires information about:

(a) Amount to be borrowed.

(b) Interest rate

(c) **Loan** term

Punch in the values for the above information and you will get all the required calculations. The adjustable rate mortgage calculator is complex. You will need the following information:

(a) Amount to be borrowed.

(b) Interest rate

(c) **Loan** term

(d) Initial length of time before loan adjusts

(e) Interval value, after loan adjusts initially

(f) Estimated rate after each adjustment

The fact remains that a mortgage calculator can just give you an estimate and not an exact figure, as mortgage rates, constantly varies. Be sure to be upgraded about current interest rates on mortgages, and consult industry experts if you want to be sure of the exact amount.

**Credit Calculator**

When dealing with credit cards, you need to be aware of the rates that go along with it. Without a firsthand knowledge of where your credit is being spent, and what are the charges along with it, you would be caught in a whirl of debts. A credit calculator could be a vital tool in helping you attain this firsthand knowledge. Not only it will keep you aware of the expense, but also avoid possible debt issues. Information required for credit calculator is:

(a) Current balance

(b) Annual interest rate

Online credit calculators help you further with months left to payoff goal and monthly payment to payoff goal.

Mere calculations done on normal calculators cannot give you a satisfying answer to your loan calculations. Therefore, if you want to understand where your debts are headed, how much money you have to pay/spend, then a financial calculator is the best guide.

**About the author**

John P. Stevenson writes for Financial Calculators – an informational site about the Canadian banking industry and Canadian loan directory.

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