Loan Calculators

Work out how much you can afford to borrow, and what the repayments will be

Almost every loan website has loan calculators- watch out for two in particular: one to tell you what you can afford to borrow given your monthly in- and outgoings; and the essential one to show what your repayments on any loan will be. Be sure also to account for payment protection premiums if required.

Almost every site offers loan calculators, not least of all because it's too complicated to work out loan rates by hand. It's also your right to know how much you're going to have to repay. Incidentally, this is a separate issue from the equally pervasive comparison tables which show how much better one product is than another. If you want comparisons, go to a truly independent source (like the MoneyFacts tables at www.moneyfacts.co.uk).

Loan calculators largely come in two versions; one to help you find out what your repayments will be for a specific type of loan, and another (slightly less common) which gives you an idea of how much you can afford to borrow. Put them both together, and it should be fairly clear what your lending budget could be.

This would also seem to be a good time to point out that loan calculators do lie. You will be shown what is known as a typical or best rate. Whether you are actually offered that interest rate by the lending company depends on your individual circumstances; and especially with banks this can be a problem. So there's no guarantee that the amount you see on screen will be the amount you pay. There's no substitute for asking a few questions.

With repayment loan calculators, also be sure to factor in payment protection insurance costs if you wish to take out that sort of policy. This can add a substantial amount to the repayments especially over longer periods or larger amounts.