SCH Kerk

anonymous asked:


Debt consolidation consists of many financial features, which are based upon certain legal provisions and involve complicated mathematical calculations. These features include various interest rates, administrative costs, monthly repayments, closing costs, credit details, details of payment protection insurance cover, affordability of the loan based upon the income and expenditure of the borrower, income tax details and much more.

It is difficult for an ordinary applicant to understand these computational complexities and arrive at the right calculation. Debt consolidation calculator is in fact software that can make these calculations in a matter of seconds. A borrower only needs to fill in the data in the calculator format for a particular calculation and he gets the required information.

You will find these debt consolidation calculators on most financial websites that specialize in providing such loans. Fill in the details of the columns to calculate your eligibility, rate of interest, and affordability of a loan.

Advantages of a Debt Consolidation Calculator

Calculating the Eligibility of a Borrower

The first important piece of information that a borrower needs to know is whether or not he is eligible to get the type and the amount of loan that he aspires for. A typical debt consolidation calculator’s working is based on standard affordability ratios that are used to compute the qualification of a borrower for a particular loan. The calculator compares the borrower’s mortgage payment with his monthly income and his total debt ratio or the back ratio with his total monthly obligations including mortgage payment.

As a borrower, you need to feed in data related to your gross monthly income, down payment, debt information including auto loans, student loans, revolving accounts and other debts, if any. Besides this, you also need to provide information regarding the zip code, interest rates, and the loan term you have in mind. The calculator then outputs whether or not the loan in question will be affordable for you. This will in turn determine your eligibility for a particular consolidation loan.

You may ask specific questions, for example, how much income you need to be eligible for a consolidation loan.

Providing Data for Comparative Study

The calculator may also help you to decide whether you should buy a new home or rent it. A tax consolidation loan is not tax deductible, which means a great saving in tax payments. A home loan may also mean a great reduction in monthly payments depending, of course, on your interest rates, the loan term and other specifications.

As a borrower, you can use the calculator to analyze the total cost to rent a home versus the total cost to own a home for a specific period of time. You need to feed the data regarding the renter’s insurance, annual rent increase percentage, value of the property, monthly taxes, monthly insurance, monthly maintenance, home value appreciation along with the zip code, loan amount, interest rate, loan payment term in years, loan points, loan costs and so on. The calculator will provide you with details about the viability of investing in a new home.

Analyzing Tax Benefits

Yet another important area where the debt consolidation calculator can help you is to discover the tax benefits of opting for consolidation debt mainly because debt consolidation loans are not tax deductible.

The data input required for this calculation will consist of your loan parameters and the month you bought your home. You can estimate your Schedule A itemized deductions because home interest and points are captured in itemized deductions. The itemized deductions including your mortgage deductions will be compared with the standard deduction to arrive at the correct calculation of your tax benefits.

Determining the APR of a Loan

Similarly the debt consolidation calculator can determine the APR or the Annual Percentage Rate for a loan. There are various ways, which companies adopt to calculate the APR based on inputs relating to mortgage fees, which may include Appraisal, Credit Report, Processing, Document Preparation, Administration, Underwriting, Flood Certificate, Tax Service, Wire Transfer, and other fees.

Roberto Sedycias asked:


A calculator is a device, usually hand-held, for calculating mathematical expressions. In the past, calculations were done in the head, on paper or by a semi-manual machine. But, this process of semi-manual calculation was time-consuming and prone to errors. Working out large sums in the head was not for everyone and calculations done on paper also were not totally error-free. Then came calculators designed to simplify all those complicated mathematical calculations. In the beginning, these electronics devices were very expensive. This was because the mechanical and electrical parts of the calculator were expensive to produce. However, as the prices of these parts fell and production techniques became better, calculators, too, became less costly and in fact, were very soon easily affordable to the average person.

In the past, calculators were as big as computers today but, soon, pocket-sized devices were available. Calculators can come in hardware or software versions and they can be mechanical or electronic. They are built into computers, mobile phones, pagers and even wrist-watches. Modern calculators are normally electrically powered and may range from small, wallet-sized models to strong adding-machine like models. These powerful calculators may also have printers in-built in them.

A basic calculator has a power point, a display unit, electronic circuit and a keypad. The keypad consists of ten digits from 0-9, equals signs, the decimal point, a cancel or clear button, on and off buttons and offers the basic mathematical calculations of addition, subtraction, multiplication and addition besides having square root and percentage calculations.

There are now many advanced variations of calculators available, each performing a specific function. For example, the scientific calculator is designed for advanced mathematics like trigonometry and statistics. The financial calculator will help in accounting and real-estate deals. The mortgage ones will show you what exactly you have to pay on your house. Apart from these there are loan, lease, time, love, area, temperature and the most advanced of them all, graphing calculators. These are all basically online calculators but they do have certain anomalies, like, if the numbers get too big or too small, some errors in calculations can occur.

The easy availability of calculators has made people dependent on them to a certain extent and most of them do all their calculations on calculators. This has its own followers as well as detractors. Some believe that using calculators hamper the basic mathematical skills of people, especially students, by making them poor in instant calculations.

In many countries, students are allowed to use calculators in their school-work because it is felt that problem-solving and estimation techniques can be taught more easily through calculators. Others worry that students may use the calculator in the wrong way unintentionally and, yet, believe the answer because that was the result shown. This type of error can take place outside school rooms also. Anyone using the calculator incorrectly will believe the wrong answer to be the right one. This might happen in shopping malls or even during business transactions.

In schools, teachers try to tackle this by asking the students to first make an approximation of the answer manually and then compare it to the calculated result. But, overall, this does hamper the child`s learning process because he or she may not understand the logic behind the answer. In such a case, calculators become more of a hindrance than a help.

Of course, when one is involved in lengthy financial calculations, these devices come in very useful. Even if one is on a holiday abroad calculators are handy for those quick conversions of currency and saves you valuable time trying to figure out the conversion rates.