How Do I Know When I’m Borrowing Enough Money?
People take out loans for all different kinds of reasons. Whether you’re looking for quick cash to catch up on rent, buy supplies for the upcoming school year, or get your car fixed, a personal or emergency loan can save you in a pinch.
But the many varied reasons for taking out a personal loan can affect the amount that you should ask for. And because every loan is different, it can be hard to determine how much you need to borrow to cover all your bases. It helps to know what goes into calculating loan amounts before you make any decisions.
So, in addition to considering how much you need to borrow (the actual amount of money you need to receive) you should understand the cost associated with borrowing the money. Understanding some of the concepts addressed in this article will help you make a more informed decision on whether or not you are borrowing enough money.
What is the Amount Charged for Borrowing Money Called?
The two primary components of a loan are the principal and interest. The principal is the amount of money that you are asking the lender to loan to you, while the interest is the cost of borrowing the principal. Generally, but not always, each month that you make a payment on your loan, a portion of that payment will cover the interest and another will go to the principal.
What is the Cost of Borrowing Money?
The total cost of your loan will vary depending on more than just the interest rate. And according to the Truth in Lending Act (TILA), the cost of borrowing is what is considered your finance charge, or the dollar amount that the loan will cost you, above and beyond the principal. Thus, this includes your interest payments and any other charges that the lender may assess tied to loan origination fees and application fees. The length of your repayment period is another important factor.
Picking the appropriate time frame for repayment can help you find the right pace and ensure that you don’t incur additional fees for missed payments. If you find yourself in a position to pay your loan back sooner than you’d planned, it may be best to do so.
Repaying Your Loan
Many people find themselves repaying their loan faster than their payment plan calls for. This will save you money on interest and help you get your financial health back where it should be faster.
Plus, if you pay off your first Spotloan in full and on time, you’ll receive a lower Annual Percentage Rate (APR) on the next one (loans two through nine have an APR of 460% vs. 490%). TILA explains that the APR is the cost of your credit as a yearly rate. With Spotloan, you may qualify for an APR as low as 99% after nine Spotloans have been paid in full and on time. This is just one of the ways that we reward our valued customers.
But if you can’t make early payments, that’s not a cause for concern. Spotloan gives you up to ten full months to repay your loan, depending on your loan amount and needs. Spotloan offers the flexibility you need to obtain a loan that meets your criteria.
What If I’m Still Not Sure What Amount to Borrow?
It’s not always easy to determine what you’ll need and if you can obtain it in a convenient time frame. But at Spotloan, we aim to make the loan process as clear and convenient as possible. We suggest plugging some numbers into the Spotloan calculator, conveniently located right on our homepage. It’s a tool that allows you to enter the amount you want to borrow and the amount you want your loan repayments to be. Scroll down and you can see (based on your sample loan selections) how many payments you will need to make to pay off the loan amount you chose. Your APR and payment amounts will vary based on your actual loan terms if approved, including your loan amount and chosen payment schedule.
Getting Approved for a Spotloan
Compared to other loan options, applying for a Spotloan is quick and easy. You’ll need:
- A job or other regular source of income
- A checking or savings account
- A valid email address and phone number
- To be at least 18 years old
When you’re ready, our easy online application takes all of the hassle out of getting started. Generally, the application takes about 10 minutes to complete. You’ll know within minutes whether you’ve been approved. Further, if you accept your loan terms on a Monday through Friday, before 10 a.m. CT, Spotloan will transfer the money to your bank by no later than 3 p.m. on the same day. For loan terms accepted on a Monday through Thursday between 10 a.m. CT and 8 p.m. CT, Spotloan will transfer the funds to your bank overnight. For loan terms accepted on a Friday after 10 a.m. CT through anytime on Sunday, Spotloan will transfer your money over the weekend and it will be waiting at the bank on Monday morning.
