Usually most of the lending organization uses Microsoft Excel to calculate the loan payment scheme of any incoming applications. By using this application, they are permitted when processing data because they can automate calculating process by plotting number and the total of monthly payments, and quickly they can get the interest rate that has been calculated. Like them, you can also create your own application using Microsoft Excel. With it you can track your loans and calculate by yourself on how much you should pay. In addition, you can also plan a payment calculations for different lending, it means that you can compare and choose which best lender for your situation.
It is very easy and simple. Here are the steps you need to do:
1. Open Spreadsheet
Open spreadsheet on Microsoft Excel through the shortcut on the desktop or through the "Start" menu and then select Microsoft Excel from the program menu. Once the application is open, you will find a blank spreadsheet.
2. label
In a spreadsheet you have opened, create the label on each row with the following labels:
* Loan amount > put this label in cell A1. This label shows the principal amount of your loan.
* Annual Interest Rate > put this label on cell A2. The label is to show the annual interest rate of the lending organization will be charged for your loan.
* Monthly Interest Rate > put this label in cell A3. These labels will be used to calculate the monthly interest rate you are charged in addition to your payment plan.
* Years to Pay > put this label in cell A4. This label shows on how many years you have to pay off the principal amount.
* Total Number of Payments > put this label on cell A5. This label shows the total number of payments based on the total number of years that you take to pay back the principal amount.
* Monthly Payment Amount > put this label on cell A6. This label shows the monthly payments that you will get including the interest rate for the month.
* Total Payment > put this label on cell A7. This label shows the results of the principal amount plus the total value of the interest rate over the period of the loan.
3. Enter values
Once you finish create the label in column A, then the next step is to enter the value for each label in column B. Make sure you follow and enter a value in accordance with the instructions below:
* Cell B1 > enter the exact loan amount. For example, if you apply for a loan of $20,000, then enter that number in this cell.
* Cell B2 > enter the values associated with the annual interest rate. Format this cells to display numbers as percentages. You can do this by right-click and select percentage.
* Cell B3 > enter the formula "=B2/12" in this cell and press "enter". Value will soon appear. Format this cell to display a value into a percentage in the same way as you did in cell B2. The number that appears is showing the monthly interest rate.
* Cell B4 > enter the number of years you will take to pay off your loan.
* Cell B5 > enter the formula "=B4*12". Value that will be displayed is the total number of payments you will need to make.
* Cell B6 > enter the formula "=PMT(B1,B3,B5)". The amount will appear showing the monthly payments you will need to make including interest.
* Cell B7 > enter the formula "=B5*B6". Values shown represent the total amount you will need to pay for the loan. This amount includes the interest rate based on the total number of years that you take to pay off your loan.
This spreadsheets also allow you to calculate loans from different lenders by entering a values in column B in accordance with the labels in column A, it might help you to determine which lenders are most favorable to you. Moreover, with this simple application you can evaluate and keep track of your loan.
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