First of all, we ask ourselves why we need a loan calculator now? In ancient times, there was nothing like a loan calculator but still lenders were giving loans to borrowers so let us understand how the system was working before and now.
How the Lending System Evolved?
My grandfather and their grandfathers said money lending is as old as the humans of this beautiful world. There was the practice of lending and borrowing in the form of trade, barter, and other elementary forms of money lending. But a precise and structured system originated in ancient Greece and Rome 3000 years ago.
In early India, money lending had been part of the Indian economy when Rigveda was scripted i.e Vedic period. The first Indian finance word is called ‘usury’ or ‘kusidin’ -the practice of lending money at a high-interest rate.
During the Maurya Dynasty, Kautilya also known as Chanakya first came up with a systemized lending structure that covers the details of creditors, borrowers, and borrower rates. During the Maurya Dynasty, also a financial instrument called ‘Adesha’ came – which is comparable to the bill of exchange of the present time. Other financial instruments were there like ‘barattes’ and ‘hundis’. Payment orders by the royal treasuries were referred to as barattes. Hundis is a principal instrument of credit, a kind of Bill written in innumerable and informal languages.
In the middle ages of the world, in Italy, the lending system was done on Italian trading streets on the bench which they called ‘banco’ and therefore came the name ‘bank’.If we look into our present-day banking system then we can say that Italy is its birthplace.
With evolution happening from time to time, the presence of the Medici family started non-interest charging banks in the 1400s which certainly got the evolution of our banking system. During this period some banking innovations took place such as-
- Double-entry bookkeeping ( Asset = Liabilities + Equity)
- Letter of credit (simple agreement between buyer and seller in exchange for goods delivered)
- Holding companies.
As the financial system became much stronger, resulted in trade expansion from one nation to another so they relied on gold as it was hard to come up with one particular thing being unique. Thus these actions gave birth to money.
As trades were being done from nation to nation people saw an opportunity to increase their income thus the new era of lending evolved in the 1800s. The people got the loan with the guarantee of their property. From this era, the lending system got a new direction and also got continuous growth and transformed with the increase in the development of technology.
At present we live in the modern millennium of the 2000s the government formed organizations to monitor and make regulations on the use of the lending system in their countries. They started providing loans to people based on their needs and purpose. There are different types of loans provided by financial and non-financial institutions. They are-
- Secured loan- car loan, home loan, etc.
- Unsecured loan- term loan, wedding loan, vacation loan, etc.
Being in the digital era of the lending system, banking and financial services took place in the modern digital world which created an easy direction for the digital lending system. Thus many financial software and mobile applications have arisen to reduce the manual workload and eliminate the traditional process of lending.
With the increase in the need for products and having the mentality to buy everything which people desire in our day to day life, now that mentality has forced us to take loans mostly short term loans, but how people will able to assess their monthly repayment, now that is the answer to the question why we need a financial loan calculator. I should broadly explain to you.
Using a Financial Loan Calculator is the best way to find out how much you can afford to borrow money. If your financial condition changes due to an uncertain event, still you can use this calculator to see your loan availability.
A Financial Loan Calculator can help you in analyzing how much you have to pay each month. You must know that all of your money is not spent at one time. The amortization table will figure out your loan remaining balance and monthly payments. And then you can plan your expenses according to your EMI.
In situations similar to this, a financial loan calculator comes in handy. As calculation involves too much math and I think we don’t have that kind of time in this fast-running world.
This Financial Loan Calculator is helpful before signing or applying for a loan. Few people know how much you can spend but others may not know so for them this loan calculator is a handful. If you have never used this kind of calculator then you will be surprised that they combine your data and come up with accurate numbers which helps you in analyzing. Changing the interest rate helps you to evaluate and compare your alternative options.
Multiple results are obtained by just changing the value of the principal amount, interest rate, and term. Due to this, it is now possible to plan the monthly revenue. Therefore this can lead to taking the most affordable loan. Even if you think you want to restructure your loan then the result is out within a fraction of a second.
At last, I want to say that let your bank balance be low and let bills be high with your demand. But here you need to learn to manage personal finance. For a few of them, it’s their need and for others, it’s for survival. It’s possible to obtain every desire you need if you are well informed and done calculations. While some people think that they can’t afford to spend more than a particular amount, you can. Using these FINANCIAL LOAN CALCULATOR you can manage out how much you can afford to pay each month and how quickly you can finish off your debt or loan.
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