You cannot have too many tools to ensure you get the best rates and financial deals regarding finances and accounting. Several tools and financial calculators will determine loan payments, interest, debt tolerance, and many other financial calculations you need to make sound financial decisions. Here are eight financial tools and calculators and how they work.
Loan Calculators
The operation of loan calculators is similar whether it is mortgages or not. Remember that the differences between a personal loan or consumer and a mortgage are that the amounts are higher in the mortgage, and the guarantee offered by the borrower is the home acquired.
Within the loan calculators, there are several utilities:
Debt Capacity Calculator
It indicates the maximum amount to request according to our current financial situation (incomes and balances already committed, such as existing debts, fixed expenses, etc.) since the foremost indebtedness credit institutions allow is usually 35-40% of our monthly net income.
Here, it will be easy to calculate the monthly installments, as the interest will remain fixed throughout the life of the loan. Knowing the amount requested, the fixed interest, and the number of years to return it, we will know the installments (monthly, quarterly, semi-annual, etc., as the case may be) fixed until the end of the loan.
For Variable Interest Loans
This calculator is much more complex than the previous one, and its results are not exact because it is an estimate in which we predict how interest rates will vary.
The necessary data are capital granted, term, initial interest, rate of variation of that interest, periodicity of the installments, periodicity of the type reviews, and reference index (EURIBOR normally).
In any case, these calculators are handy for comparing loans since variable data, such as the interest rate, will be the same at the time of comparison.
Financial Tables to Calculate Quotas
These are tables in which various types of interest appear in a column, and in rows, the possible terms of the loan so that the different monthly installments to be paid can be cross-checked (for example, for every 1000 euros of the loan). So we can have a rough idea of the fees we will deliver.
Therefore, the loan calculators help us know what maximum amount they will grant us, what fees we will pay in the future, and most importantly, they help us compare different options.
Pension Plan Calculators
We can estimate the total amount of the pension plan at the end of its term, knowing the annual contribution, the increase that we will make of that yearly contribution each year, and the term of the plan, always bearing in mind that it is an estimate as the profitability varies annually.
In addition, many of these pension plan calculators also indicate the expected annual fiscal savings according to the taxable base in the IRPF of the person making the calculation.
Investment Calculators
As in mortgages, we will distinguish the investments with known and safe returns from investments with variable and uncertain returns to calculate the returns on investment.
Investments with Safe Performance
For safe yields (bonds, fixed-rate deposits, etc.), knowing the amount to be invested, the type, and the term to obtain the annual, monthly, etc. yields will be enough.
Investments with Variable Yield
The calculators are meaningless for uncertain investments (stock market, mutual fund, currency market, etc.). Known as the past phrase, profitability does not presuppose future returns, and we can only calculate the gains or losses already incurred.
There are indeed mixed investment funds, which combine investments with certain returns and other equities, guaranteeing (except colossal economic collapse and massive bankruptcies) yields in a possible range. We can then calculate the different profitability of these mixed products as the variable income part evolves.
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