Installment loans are a proven helpful means of improving own financial situation and credit history. Usually people take installment loans for urgent needs like some purchase or to cover an unexpected spending. However, this business went further and now offers different amounts of money to cover almost anything – starting with medical assistance and buying a car and ending with buying a pet.
If you cannot afford to buy a pet yet, why not take a loan? Frankly saying, we have dug many queries in the search engine on the matter of pet installment loans and met one link only. A company called “PetLoans.com” offers loans for one goal – to finance your pet cost. This lender is an exclusion out of common rule to offer loans for common household needs. PetLoans.com is ready to lend from $1,000 up to $35,000 to fund your purchase. Usually, you may spend around 1,000-3,000 dollars for a purebred puppy. This is a rather serious one-time purchase, which needs special funding. This particular company finances the purchase of not dogs only but cats, snakes, reptiles and many other animals. This company is not intended as an object of advertising. It is rather given as an example.
The “pet installment loan” may have different meanings: first is the one described above – you borrow money to allow yourself purchase of a pet. Another interpretation of the term is borrowing money to cover necessities of your dog, for instance. We are speaking about possible veterinary assistance, gear, training classes, dog hotel, etc. For this case, there are countless companies that are eager to sponsor your dog’s care and other necessities. Pet care loans and veterinary financing has become more widespread as pets sometimes constitute serious part of family budget. Especially in case of emergency.
Pet loans bear the same benefits as usual loans: quick online application, almost instant approval, low interest rates/ rates depending on your credit history, sometimes very transparent payment strategy and no penalties. Companies usually cover an array of dog-related medical issues: annual check-ups, spay and neutering, teeth cleaning, parasites, dermatology, rehabilitation, medication, diagnostics, emergency services, care of chronic pet diseases and conditions, vaccinations, microchipping, pet food, surgical procedures.
Before applying for a pet loan, you should thoroughly examine the terms and conditions that the company bases its loan politics on. Don’t forget that the low-rate may be just a marketing trick: low interest rates are offered to clients with good credit history and barely anyone ever gets claimed 7% instead of 17%. Another thing is the terms written in the contract that may sometimes even contradict to what you have read on the site. In order to find the best lender, examine all companies, find those that seem to you more trustworthy and visit each one of them if they are in your vicinity and read their actual terms stated in contracts.
Great evaluation of the pet financing companies and conditions they offer is presented via this link. John Kiernan of CardHub gives a thorough look on financing options, veterinary assistance programs, money-saving tips and offers several links to vet experts that will answer any question of yours about financing your pet.
The payments you will have to perform monthly are calculated using the EMI (equal monthly installment) method. You can calculate the payment by hand using the formula or with the help of Excel. Eventually, there are dozens of online calculators that will calculate the payment for you. Let’s go through every option
Calculating by hand
- Find your loan information. It is usually stated in the agreement. If you are estimating payments before applying to a loan, put in the estimates.
- The EMI formula defines the monthly payment as P(r(1+r) ^n)/((1+r) ^n-1). “R” stands for monthly interest rate associated with your loan. If you don’t know the monthly interest rate, divide the annual interest rate by 12. If the annual interest rate is 12% then the monthly interest rate will be 1%. In order to use it in our formula, divide 1% by 100 in order to express as a decimal. 1/100=0.01 will be our monthly interest rate used in the formula. Note, that the first “r” in this equation equals the annual rate divided by 100! “N” stands for the number of payments made over the term of the loan. Thus, a 2-year loan paid monthly equals 24 (2 years x 12 months). Hence, we put in the formula above “24” as “n”. You put the exact number of payments for “n”. “P” stands for “principal” – the amount of the loan as well as the final price.
- Put digits into the formula. In the example above n=34, r=1 and the principal will be 2000 dollars. Therefore, our monthly payment will be the following: 2000*(0.12(1+0.01) ^24)/((1+0.01) ^24-1).
- Solve the parentheses first, simplify the equation to 2000*(0.01(1.01) ^24)/((1.01) ^24-1).
- Calculate the exponents. Our equation now comes to the following calculation: 2000*((0.01(1.269)/(1.269-1))
- Calculate the parenthesis making 2000*(0.01269/0.269).
- Dividing and multiplying we get 2000*0.04717472=94.349$ of monthly payments.
Conclusion: at the interest rate of 12% for a loan of 2,000 dollars borrowed for a term of 2 years, you will be paying 94,35 dollars monthly. Now multiply the monthly payment by the number of payments (24 months – 24 payments) and you will pay 2264.4 dollars. You will overpay 264.4 dollars for the money you borrowed. Before borrowing money, perform the monthly payment calculation to know whether the terms your are about to agree with are profitable for you.
- Open Excel. Type “Payment” in any free cell and click on the closest free cell to the left.
- Use PMT formula by pressing the formula icon. In the cell where you want to get the payment calculation result type the “=” sign or click the “fx” button which is situated below the toolbar (by default).
- If you click the “fx” button, choose the “PMT” from the search box. The PMT function will bring up a dialog box to enter your digits. If you choose to type “=”, then complete the line by typing “=PMT(Rate, Nper, Present Value, Future Value, Type)”. Using the “fx” button is more preferred for novices.
If you click the “fx” and bring up the PMT function dialog box, enter the information into the dialog box:
- “Rate” is the monthly interest rate which is 1% in our example. Don’t forget that the monthly interest rate is calculated by dividing the annual interest rate by 12 (number of months).
- “Nper” is the number of periods in the loan. If it is 2 years as in our example, then we put in “24”
- “Pv” is the present value of the loan, the amount of money you borrow, which is 2,000 in our example.
- Put “0” into the “Fv” box.
- Leave the “Type” box blank.
If you type the whole equation into the cell, put in “=PMT(0.01,24,2000,0)”. Now read the result: payment equals 94.349. You may notice that the loan is written as a negative number. It is easily explained – you pay money instead of receiving it.
Use your favorite search engine to look for installment loan payment calculator. Choose a site that doesn’t ask any personal information. All calculators ask the same information – APR or monthly interest rate, number of payments, the value of the loan. Open several calculators in the browser in order to re-check the results.