Lump Sum Repayment Calculator
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'When life gives you lemons, make lemonade.' This adage fits perfectly with mortgage repayments, so if you find yourself in a position where you can make a sizable payment toward your loan, seize the opportunity. With UMOceania's lump sum calculator, get an estimate of your savings that you unlock when you pay off a portion of your debt.
A lump sum payment can significantly affect the length of the loan and the amount you can save, much like additional repayments can. By making a lump sum payment, you can significantly reduce the overall interest paid on your loan, especially in the early years.
With the aid of this calculator, you can estimate how long your mortgage will last and how much interest you will end up paying by making lump sum payments.
What Is a Lump Sum Repayment?
When you make extra repayments towards the borrowed amount, it is termed lump sum repayment. Consider it a mortgage management technique that allows you to save money on interest and shorten the repayment tenure.
Lump sum repayment is the foremost technique that allows you to repay your loan before the closure date.
However, if you wish to give a shot to lump sum repayment, do it in the initial years, as the interest component is higher during this time. Pin your hopes in UMOceania's lump sum calculator to make a more informed decision. This handy device allows you to get an estimate of how much you can save. Additionally, you can compare different scenarios to come up with the best possible deal.
However, not all lenders allow you to make lump sum repayments and might ask you to pay associated charges. Thus, you must go through the fine print of your loan document to know the repayment charges for the same.
What is a Lump Sum Repayment Calculator?
A lump sum calculator is an advanced utility tool that allows the user to get an idea of savings that can be made through lump sum payments. Borrowers have to repay the loan amount for decades, and lump sum repayments allow you to close your loan early. Additionally, it offers the opportunity to save huge amounts of interest when made during the initial tenure. The lump sum repayment calculator allows the user to get accurate results in split seconds by providing a few values in the text field.
How Does UMOceania's Lump Sum Repayment Calculator Work?
Computing the savings through lump sum repayment can be a daunting task; that is where UMOCeania's lump sum calculator comes into play. All you have to do is enter a few values, and the calculator will display the final result on your screen.
You will need to enter a few details, i.e., extra repayment amount, frequency (monthly, weekly, fortnightly), and lump sum amount and year. Based on values entered towards these fields, the calculator will provide you with interest saved and time saved.
How to Use the Lump Sum Repayment Calculator?
The user doesn't need any expertise to compute values through a lump sum repayment calculator. Even a newbie can use this calculator with utmost ease because of its user-friendly interface. To use a lump sum calculator, you will require the below-depicted details:
- The Loan Amount: the amount borrowed from the lender.
- The Loan Repayment Term: the time in which the borrower is bound to repay the loan amount in installments.
- The Interest Rate: interest rate at which the lender has provided the credit to the borrower.
- The Repayment Frequency: how frequently you are liable to make repayments, i.e. weekly, fortnightly, monthly.
- Lump Sum Repayment: the significant amount the borrower wishes to repay at once.
- Lump Sum Made Per Year: the point of time the borrower wants to make the lump sum payment.
Once the user enters values in the said fields, the calculator will provide the result on the screen. The output lists the amount and time the borrower saves by making lump sum repayments. The lump sum payments go towards the principal component, thus reducing the interest component and repayment tenure.
Features and Benefits of Lump Sum Repayment Calculator
The lump sum rate calculator offers the below-depicted features and benefits to the user:
- User-friendly interface for quick computations.
- Allows users to compare multiple case scenarios.
- Users can use a lump sum calculator multiple times, free of cost.
- Offers quick and accurate results at lightning-fast speed.
- You can compute values from the comfort of your home without any geographical barriers.
- The calculator assists in better mortgage management.
- It helps to save huge in terms of interest component and repayment tenure.
- The calculator showcased the results right after entering the input values in seconds.
How Accurate is the Lump Sum Repayment Calculator?
UMOceania's lump sum repayment calculator provides 100% accurate results based on the entered input values. Errors are probable when you put forward manual computation for the same. But with this financial tool, everything comes to your fingertips. It is easy to use; you need to enter a few values, and the result is computed in seconds. All you have to do is to move with the same amount or close your mortgage early and pile savings.
Frequently Asked Questions
How much could I save with a lump sum repayment?
The amount an individual can save through lump sum repayment entirely depends upon the amount repaid. The borrower can save huge amounts in terms of interest component and repayment tenure.
How will extra repayments affect my mortgage?
Extra repayments lower the principal amount, further decreasing the interest component. With the reduction in these, the borrower can pay off the loan earlier than the closure date.
Is it good to pay a lump sum?
If you get the opportunity to pay a significant amount towards the loan, take advantage of it. Making such an extra payment or lump sum payment allows you to eliminate the loan burden earlier. Additionally, you can save on the interest part.