If you clicked on this post about calculating interest on a loan, I’m guessing that you’ve considered the possibility of needing to take out a loan soon for a specific reason. Let me first congratulate you on taking the initiative to learn how to calculate the financial risks beforehand.
Back when I was in college, I got a call about a family emergency. Due to more surprise expenses than expected, I was asked if I could lend the money. It made me nervous to need to take out a $4,000 personal loan, especially since I was still paying off my car loan of about $17,000. It was for family, though. What harm could it do?
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I finally noticed that I’d barely put a dent into the loan’s remaining balance! What the heck!? I’d made sure to set up auto-payments to ensure that I wouldn’t be late for any payments! Shouldn’t this remaining due be a lot lower!?
That’s when I had my first noticeable experience with the results of high-interest rates. My car, fortunately, had a low-interest rate of less than 10%. I barely noticed the interest fees. However, those fees are a LOT more apparent when the interest rate is significantly higher!
The good news is that I was both allowed and able to pay that loan off early thanks to heavy budgeting and multiple jobs, but that experience made me realize that I did not understand the math behind interest rates and calculating loans.
And I couldn’t be the only individual who didn’t understand it seeing that the U.S. student loan debt has broken through the $1 trillion mark!
It was time for my fiancé to go to school instead! The challenge though was that due to the in-class schedule, we would be down on some household income. Stevenn and I talked it out and decided to move to a smaller, cheaper apartment, but it was apparent that we would still need some financial assistance. Therefore, we needed another loan.
But this time I went into this contract with more focused curiosity than a kitten seeing her reflection for the first time!
I sat down with my loan contract and a calculator to figure out the estimation for myself! To be honest, I had more headaches in this one mathematical challenge throughout the rest of the year combined!
These mathematical problems center mostly around the amount borrowed, the monthly length of the contract, and the possible interest rate percentages! There is one step that I’ve literally dubbed “mystery step” because of the strange math behind it, but it’s the step that ended up evening everything out! Although I strongly disliked the interest rate to the agreement, I found that this learning opportunity on calculating interest on a loan was invaluable!
Because I know what it’s like to feel trap in a loan, I’ve created this course to break down the math behind calculating interest on a loan into eight simplified steps.
If you’re interested in learning these simple steps on how to calculate interest rates, you can enroll in the course here.
Don’t make the same mistake as I did by going into a loan agreement blindly. Make sure you know exactly what you’re paying for and how your options vary!
Make sure to make financial security a goal in your life, and remember to just live your life one story at a time!
Take care,
Kyndall Bennett from Kyrabe Stories
Click the image to learn more about the course!
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We're a gaggle of volunteers and opening a brand new scheme in our community.
Your website provided us with valuable info to work on. You've done a formidable process and
our entire group will probably be grateful to you.
Very helpful information for someone in a pinch. Thank you for sharing your expertise!
Thank you for checking out the post! ?
Great idea to offer a class. Every young adult should learn about loans! Fortunately I don’t have any at this stage in my life!
That's really good, Cindy! I truly hope that it remains that way!
Yes, people definitely need to learn more about loans.
Preferably while still in high school if not earlier!
Interest can be such a problem when you owe it instead of earning it!
Right!? Thank you, Tracy for coming by!
I agree there is so much more to lending than what we see at first. Thank you for sharing
Thank you, Lisa! It really should be focused on more in high school if they're going to give us that many math classes anyways.
If only they focused on real life issues like loans, mortgages, credit in school, rather than things that aren't a life skill, fewer people would land in overwhelming situations. The climb out isn't an easy one, I know because I speak from experience.
I agree, Maria! We're given so many math courses in school, it would have helped to have shown the math behind how much interest will actually cost us over the years! I had pick up extra jobs to pay mine off, and my fiance's car could have been paid off a lot earlier had we realized how much his interest was charging and if we had refinanced it earlier!
Thanks for sharing! So many don't understand about what taking out a loan means.
No problem, Lina! It's true. Loans can be helpful in tight moments but only if one is prepared for the challenges that may come with them.
Information all consumers should be cognizant of. Good luck with your course!
Thank you, Suzan! I hope it helps someone avoid the financial trap!
I hate interest! Great advice, pay off loans early.
I do too, Lisa! I hate interest with a passion!