Loan Formula

Printer friendly excel spreadsheet for creating a loan amortization schedule. You just type loan amount, annual interest rate, loan period (in years) and start date of loan, then the spreadsheet automatically calculates and shows you the payment schedule.

In recent years, millions of homeowners have taken advantage of low rates and refinanced their mortgages. This article describes the advantages and possible pitfalls associated with a “refi.”

1.     Home Refinancing Basics

In recent years, Americans seeking to take advantage of low interest rates have lined up to refinance their mortgages. In fact, refinancings hit an all-time high in 2003, and remained high in both 2004 and 2005, according to the Mortgage Bankers Association of America.

But while it’s true that refinancing has the potential to help you reduce the costs associated with borrowing money to own a home, it is not necessarily a strategy that makes sense for every individual in every situation. So before you make a commitment to refinance your mortgage, its important to do your homework and determine whether such a move is the right one for you.

There are three major factors that affect how much you pay for a loan. Understanding these factors can save you time, money and frustration.

1. The Federal Reserve Discount Interest Rate.

Banks and other lending institutions borrow money from the Federal Reserve Banks. The discount rate is the interest rate a Federal Reserve Bank charges eligible financial institutions to borrow funds on a short-term basis. This rate is set by the boards of directors of the Federal Reserve Banks. The discount rate has a direct effect on the “Prime Interest Rate”, which is the interest rate on short-term loans that banks charge their commercial customers with high credit ratings. You can get live information on the current Prime Rate at www.FedPrimeRate.info.

Of the three major factors that affect your interest rate, this is the one you have the least amount of control over.

Home repair loans are great for those emergency leaky roofs or the shingles that have gone beyond their twenty years and just need replaced. These lending agreements are also wonderful for that driveway that needs blacktopped again or a swimming pool that needs a new liner or perhaps electrical wiring that is thirty years beyond its prime. This special lending agreement is important for the over 70% of Americans who live pay check to paycheck and do not have savings to cover these kinds of major expenses. Living paycheck to paycheck means, in most cases except for the very destitute that debt has enslaved our country and our citizenry must count on loans for those much needed maintenance projects on the largest single investment most of us have. So what are the best places to look for these lending agreements?

Continuing education is sought after by a number of people. Generally speaking, continuing education programs can be divided into two classes. The first is general adult education, including courses taught beyond regular postsecondary education like an undergraduate degree. Adult education can include subjects like English as a Second Language, literacy, vocational training, GED preparation, and other forms of non-traditional education. Continuing education programs in this category may or may not be taught at an accredited higher education institution; some may be taught at vocational schools or local community centers, while others may be at an accredited community college.

Students and families are often confused with the variety of options available when it comes to financing a college education. There are a myriad of options, from college scholarships and grants to federal and private student loans.

As part of the Higher Education Act of 1965, President Lyndon Johnson created a law which was intended “to strengthen the education resources of our college and universities and to provide financial assistance for students in postsecondary and higher education.” This increased all sources of federal funding provided to universities and added in grants and other forms of financial aid, including new student loan programs.

The first federal loan, federal Stafford Loan, is available to both undergraduate and graduate students enrolled at least half-time at a college or university accepting federal aid. This is a need-based program in which undergraduates may borrow up to $5,500 per year in subsidized funds based on academic level and graduate level students may borrow up to $18,500 per year (up to $8,500 in subsidized funds and the remainder in unsubsidized funds). The funds are sent directly to the school and are applied to the student’s account. To ease the financial burden, payments are not required until six months after the student graduates.

Every year, misinformed homebuyers, often first-time purchasers or seniors, become victims of predatory lending or loan fraud. Here are the top ten ways to avoid becoming a victim yourself.

You may qualify for a lower monthly payment formula in the new student loan repayment program. But it can only be done with federal direct student loans FFELP loans, Grad PLUS loans and federal consolidation loans that do not include Parent PLUS loans. Federal Perkins student loans require Direct student loans consolidation.

The income-based student loan repayments schedule is a godsend for graduates in fields without recession proof jobs or with significant college loan debt. In this plan, your monthly payment formula is limited to 15% of the amount that your adjusted gross income exceeds 150% of the poverty line, divided by 12 (months).

So, for instance, if you are single and your income is $16,245 (contiguous 48 states- the poverty line is higher in Alaska and Hawaii), you would pay $0.

If your income is more than that, than the 15% of your income above that figure (divided by 12) would be your monthly payment.

Your income is adjusted lower for increased family size.

Where rate = Annual Percentage Rate divided by 1200
For example, an 8 % annual rate becomes .0066666666666666…

Let’s suppose we want to borrow $150,000 for 30 years at 8 per cent annual percentage rate. What is the monthly payment?