A personal loan calculator is a great financial tool that allows you to work out how much you can afford to borrow, what the repayments will be and how long it will take to pay off a personal loan.

It is a relatively straight forward concept but one that is invaluable when it comes to being careful with your cash. It is also easy to use and can be done in a matter of minutes and three easy steps. There are generally three pieces of information that is required in order to make the loan calculator work - a projected loan amount (how much do you need) , one or more prospective repayment terms (how long do you think you need to repay the loan) and one or more potential interest rates.

It may seem straight forward and the truth is, it is. The personal loan calculator is perfect if you are worried about repayments and are unsure about whether you can afford a loan in the first place. Once you have entered in all your details, the calculator will usually give you the details of the amount that you will have to pay back every month, the amount of months you will be paying the loan off for, and in some instances will provide information on different loan packages.

It is important to note however, that whilst the calculator proves very useful, it is still only a tool that should be used as a guideline only. All rates depend on circumstances and loan amount and after the assessment of personal circumstances and financial behaviour, figures are subject to change.

However, if it is a rough guide you require it can prove to be a positive tool as it is an important part of the loan decision process for many people.