How we derive our interest rates estimates and make our calculations.
About our Loan Calculators
Most loan calculators ask the user to enter an interest rate before it will calculate loan payments and amortization, but what most of us want to know is the interest rate we'll be charged.
We designed our calculator to help answer that question and provide some useful intelligence for consumers shopping for loans or credit.
The problem is that banks and finance companies are notoriously secretive about their lending rates. Sure, you can find information on their best available rates, but many people don't qualify for those rates and banks don't normally post their full range of rates.
So where did we get our rates? Research. Phone calls. Consultation. More research.
We've constructed our loan calculator algorithm using the best information we could find from industry sources and public information.
When determining interest rates we take a few things into account:
Country: Prime lending rates will vary from country to country as determined by their central banks. Lenders base their rates in part on these central bank rates.
Loan Type: Interest rates for used vehicles are typically higher than for new vehicles. Unsecured personal loans rates are higher still. Our calculator does not include mortgages or home-equity loans as these are well covered by other websites.
Credit Rating: You'll pay more if you have a lower credit score and less if you have a higher score. The algorithm uses our best approximation of what interest rate might be relative to the selected credit score.
It's worth noting some finance companies focus on specific types of clients and they may offer higher rates for clients outside their target consumer.
They may not even want your business if you fall outside their risk profile.
For example, some companies focus exclusively on clients with very high credit scores while others may focus on moderate risk or higher risk clients.
Our calculator tries to find some middle ground but there's a good chance you'll find rates outside the ranges of our estimates.