If you're considering a loan from Windmill Microlending and want to understand your potential financial commitments, using the loan calculator on their website is an excellent way to get a detailed breakdown of your payments. Here’s how you can use this tool:
Steps to Use the Windmill Loan Calculator:
- Visit the Website: Go to the Windmill Microlending website or directly access the loans page at Windmill Microlending - Our Loans.
- Find the Loan Calculator: Scroll down the page until you locate the "Loan Calculator" section.
- Adjust the Sliders:
- Loan Amount: Use the slider to adjust the amount you wish to borrow.
- Education Term: Set the duration of your educational program.
- Repayment Term: Choose how long you plan to take to repay the loan after completing your education.
- View Your Payment Details:
- The calculator will automatically update to show you:
- Interest-Only Payment: The amount you will pay monthly during the education term, which covers only interest.
- Interest and Principal Amount: Your monthly payment after the education term, covering both principal and interest.
- Total Interest: The total amount of interest you will pay over the life of the loan.
- Total Payment: The overall amount you will have repaid by the end of your repayment term, including both principal and interest.
- The calculator will automatically update to show you:
Understanding Your Microloan Repayment
A Windmill microloan is categorized as an installment loan, which means that you are required to make regular monthly payments until the loan is fully repaid. The amount of each payment is based on the total amount disbursed to you under the terms of the loan.
Key Elements of Your Microloan Payments
Outstanding Balance: When you log in to the Windmill Client Portal, you can view the Outstanding Balance of your loan. This balance includes all the principal and interest that you owe.
Interest Calculation: Interest on your loan is calculated daily based on the borrowed amount and the duration of the loan term. The total cost of borrowing, including how interest accrues over the life of the loan, is outlined in the Loan Disclosure Statement you signed when accepting the loan.
Impact of Loan Restructuring: If you request a restructuring of your loan, such as extending the term or lowering the payments, the overall cost of borrowing will change. Extending the loan term will generally increase the total amount of interest you pay because you are spreading the repayment over a longer period.
Application of Payments: Payments received from your account are applied in the following order:
- Outstanding fees
- Outstanding interest
- Principal balance
Any excess payment after covering these areas is directly applied to reduce the principal balance further.
Example of Payment Allocation: If you miss a payment, the next payment you make will first be used to cover that missed payment before being allocated to the current due amounts.
Special Note on Loan Payoff:
- Non-Revolving Loan Structure:
- Windmill’s loans are set on a fixed installment basis. This means if you decide to pay off your loan early, you must cover the interest accrued for the entire installment period up until the payoff date. Unlike revolving credit, the loan does not adjust daily based on the balance you pay down.
If you are interested in learning more about installment loans,refer to this Investopedia article.
By staying informed about how your loan payments are structured and applied, you can better manage your finances and work towards successfully fulfilling your repayment obligations.