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What is the advantage of an interest only loan?


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2011-09-13 18:25:30
2011-09-13 18:25:30

The advantage is that the payment will be lower for a given piriod of time, however the payment will increase quite a bit after that time. you will be making payments of the interest and principal. make sure that you pay off the loan or at least that you can afford the payment after the pomotional period ends, usually 3 to 5 years.


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Main advantage = money to work with. Main disadvantage = high interest rates. (If there is a low interest loan available, this may tip the advantage in your favor.)

An interest only loan calculator will not help you to determine your overall monthly payments. This will only calculate your total interest payment. To know the total cost of your loan use a loan calculator.

The main advantage is that you don't have to pay interest on a loan to support your business.

The advantage of an interest only loan is that for a predetermined period of time you only have to pay the interest portion of your loan along with taxes and insurance. You do not have to pay on the principle of the loan. This option is best for people who expect to be making more money when the predetermined period is over. The more important question is what are the disadvantages of an interest only loan? Basically you can run across a few problems. The first one is that you are not paying down the principal of the home. That means the amount you bought your house for is still the amount you owe on it after the predetermined period is over. Second, you have to be prepared for the increased monthly payment after the interest only period is over. As mentioned above this type of loan is best for those individuals who expect to be making more money after the interst only period and also for those individuals who can take the difference they would have been paying monthly if the loan were conventional and invest it for the predetermined period.

The best type of loan that one can get is an interest only loan if they are not able to make large payments for a period of time. However, if one only pays the interest on the loan, the principal itself will never decrease leaving you in debt longer.

An interest only loan mortgage accomplished a few things. These 'things' consist of a very small principle payment, or even just interest only payments.

If you repay your loan before the interest comes due you will be probably be paying no interest on your loan. You will probably only be paying off the principal.

An auto loan calculator can only calculate interest if you input the interest data. Otherwise, the calculator has no idea of knowing how much the interest is.

Companies that provide a home equity loan in which the purchaser only has to pay interest are any national bank. To get the loan and only pay interest the applying person must have a credit score above seven hundred.

The loan whose interest rate is low is called low interest loan. If you got a unsecured loan @ low interest rate then it would be low interest loan for you.

The biggest and most important and probably only true advantage of low interest loans is cost. This is especially true the longer and bigger the loans are. A few percentage points in interest can magnify your savings exponentially.

There are many websites that carry an interest only loan calculator. One can find them at 'NCalculators', 'Bankrate', 'Loanpage' or 'MoneySupermarket'.

Simple interest is interest that is calculated only on the amount of unpaid principal on a loan. Such interest is not added to the value of the loan but is tracked separately. Compound interest is interest that is calculated on the total of unpaid principal and accumulated interest on a loan. The difference is in simple interest there is no interest charged on accumulated interest while in compound interest there is interest charged on accumulated interest.

In a fixed interest rate loan the rate of interest around the loan billed through the bank is constant within the tenure from the loan. You need to choose a fixed interest rate only when you are feeling the interest rate prevailing on the market have touched very cheap and also the rates are only able to move upwards.

Yes! Simply go to and type in the required data. You will need to have your loan amount, interest rate and how many months are left to pay your bill to calculate your monthly payments.

Repay the loan with the funds raised from a lower interest loan.

Home loan interest calculator is necessary to check the interest of the loan before purchasing, however the interest can change when actual purchasing, therefore it is necessary to get a basic information and idea only.

Yes, but only if the loan was made with the understanding that interest was to be paid on it. A loan is a contract between two people and is enforced according to its terms. If the contract has no provision for payment of interest then you have no right to demand it or sue for it.

When using a payday express loan, the proper terminology for postponing the payment until next payday and only paying the accrued interest is called an interest only loan

Interest only loan calculators can be purchased at office supply stores such as Office Max or Staples. They can also be purchased online through Amazon.

An interest only home equity loan allows someone to pay only the interest on their mortgage for several years and not pay the principal. This is a good option for people in lower income situations to avoid going into default.

One of the main benefits an ARM loan has over a regular mortgage is the interest rate. Should the interest rate drop, one with an ARM loan has an advantage of a lower interest rate without having to refinance. Monthly payments will be lower as well with an ARM loan due to fluctuating interest rates.

if it is a loan based on household purpose it is 0% only.

In a traditional mortgage, the loan if fully amortized. Meaning that you pay both interest and principal. In order to lower the monthly payment, some mortgages allow you to pay only the interest. This results in a lower monthly payment, however the balance of the loan stays the same.

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