If you borrow 10K and pay it back as an installment loan for a period of ten years, you are looking at these numbers. We’ll use a typical car loan style interest rate at 7% and monthly payments.

Principal Loan = 10000

Interest Rate (APR) = 7%

Payment Frequency = monthly

Number of Years = 10

Number of Months = 120

As follows;

Total Amount to be paid over the full ten years =  $13,528.82
Total amount of interest  paid over the full ten years = $3,528.82
Payments every month = $111.20

Seems like an unlikely loan to get approved for, and that’s because it is. Lenders will not usually approve a loan for 10K over that length of time. They will want a loan like this paid back in three years – five years at the very longest. I know they make more interest over the longer period, but they want the note off their books ASAP.

It’s all about churn and turnover hear. By the time the do all the paperwork and pay for all their administration costs, they don’t see these kinds of “micro-loans” as being worthy of their time. They want bigger loans so they can cut down on their admin expenses and they want security on their loans. It’s tough to get security on these smaller loans.

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A LOAN CALCULATOR; Enter your loan amount, how many years, the interest rate, and payment frequency (14 for biweekly, 30 for monthly, 7 for weekly. Very helpful so you know exactly what the loan will cost you in interest payments and you will know the total COB (cost of borrowing).

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Interest:

Years:

Days between payments:
30 for a Month, 7 for Week
and 14 for Bi-Weekly. Easy!

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