- Loan balance
- Loan balance is the total remaining balance on a loan. If you are uncertain of your exact balance, enter an estimate that is as close as possible.
- Loan payment
- The payment amount is your current monthly payment.
- Remaining payments
- The number of months you have left to make payments on a loan. This is calculated from the interest rate, monthly payment and current balance of the loan.
- Loan interest rate
- Annual interest rate for this loan. Interest is calculated monthly on the current outstanding balance of your loan at 1/12 of the annual rate.
- Credit card / credit line balance
- The outstanding balance on your credit card. You do not need to include finance charges; they will be calculated based on your interest rate.
- Credit card / credit line rate
- Annual interest rate you pay on outstanding credit card balances. This calculator assumes simple interest is charged every month at 1/12th of your annual rate.
- Credit card payment
- Credit card payments are based on your outstanding balance and annual interest rate. For this loan comparison, the monthly payment is the amount required to pay off your credit card in the same number of months as your consolidation loan. Your actual credit card payment may be lower, but will often require many more payments.
- Interest rate
- Annual interest rate for your new consolidation loan.
- Term in months
- Number of months for your new consolidation loan.
- Up front costs
- Any fees you are required to pay up front to receive this loan.
- Rate earned on savings
- This is the rate of return you would expect to make on your closing costs, if you were to invest them. This could include appraisal fees, loan origination fees, etc.
The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2023, had an annual compounded rate of return of 15.2%, including reinvestment of dividends. From January 1, 1970 to December 31st 2023, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.9% (source: www.spglobal.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
- Include closing costs in loan
- If you include your closing costs in your loan, your loan balance, monthly payment and total interest paid will increase. You will, however, be required to pay less money up front. Including your closing costs in your loan may be a good option if you do not have funds available, or you can achieve a relatively high rate of return on your savings.
