Once you get a loan from any bank or organization, you will automatically undergo a process called loan amortization. This is a procedure in which the debtor pays off the loan in a periodic manner.
The process of calculating the amortization requires a lot of effort. The payments are calculated by dividing the principal by the number of months designated for the payment. The principal is the total balance of the loan while the number of months is the payment schedule or what is called amortization table.
After calculating the monthly amortization, interest rates are added to it. The interest is calculated depending on the current rate the loan was taken. An amortization period usually goes 15, 20, or even 30 years. Mortgage amortization is one example of amortized loans.
With all these calculations, the job of the lender doesn’t end there. During the whole amortization table, a lot of tedious work needs to be done. To help out the lenders, various software is being made to help both parties in making the whole process a lot easier.
The market offers different kinds of software that deals with loan amortization. The programs start from loan calculation to filling up the amortization chart. Five of the best tools that are out in the market include:
- The Amortizer 6.2. This tool is a financial calculator and is good especially if you are considering mortgage amortizations. It gives you a chart breakdown of all the components of loans, calculates the payments, and compares the rates of the loans. It has an added database that allows you to keep some contact information of people who can help you out like bankers and loan advisors.
- PerSense 4.0. This software provides a quick way to get a calculation of mortgage, amortization, and other loan information. It can specifically tell you how long you need to pay off a loan and as well as the present and future value of the investment.
- Loan Amortization Calculator 1.0. This is one of the easiest tools to do all your loan calculations. It can give you a calculation of the initial amount of the loan, regular monthly payments, annual interest rates, and the like.
- QuikCalc Amortization 7.0.45. It displays a chart that helps track payments for the loan including loan terms, payments, payment dates, and late fees.
- Amortization Schedule Calculator PHP script 1.0. This has a feature of calculating payment schedules of loans. It helps estimate the loan amount that a person can afford. It has a free amortization calculator available online that can help a person decide on loans before dealing with a bank or broker.
The determinants of the rank of each tool here are: the reviews and the downloads made by the users. There are free downloadable versions of each kind that interested individuals can download to help in deciding as to whether to get a loan or not. Also, it helps lenders and debtors manage the payments to avoid any inconvenience.
In total, loan amortization programs do not only make lives easier, they help in the proper management of loans.