Choosing a loan and the Bank to get it, are you targeting the interest rate on the loan. If one Bank offers a rate of 10% and the other 11%, you of course select the Bank which offers lower interest rate. But even if you took out a loan at the same low percentage, the payout amount can vary.
Annuity or equal payments made monthly – payments will be the same throughout the crediting period. When differentiated payments - payments on the outstanding debt, the initial payout amount will be higher than in the first case. In the subsequent payout amount decreases every month and the amount paid for the entire loan will be less. So taking a loan at one interest rate, for the same number of years, the amount of payments is different, as the end result.
At differentiated payments the balance of debt is reduced, and therefore reduced interest payments. Accordingly, the full amount of the payments will be lower.
In annuity payments, the borrower does not care about percentages and the share which goes to repay the loan. The Bank itself shares paid the amount of the loan on part repayment and interest. Therefore, in the first years of repayment, the proportion of funds that go to the cent higher. At the end of payments most of the money goes to repay the principal amount of the loan. The Bank takes its profit forward. If you decide to repay the loan, the interest taken by the Bank ahead you no return.
Therefore, when different types of loan repayment total expenditures for the same percent different. That is, is this math, when 2+2 not always equals 4.
In the market of banking services, you can find a lot of offers for loans and making your choice in favor of one or another Bank, you might want to learn how to calculate the interest on the loan. It is no secret that if the Bank offers a loan at 5 percent, you will have to pay more than at another Bank, and under 12 percent, and just, in the first case, the calculation is always performed on the original loan amount, and the second for the rest.
They differ from each other interest rate on the loan, period of loan, purpose of loan, as well as a number of additional conditions. How is the amount of interest on the loan? You can calculate this percentage using fast but accurate methods of calculating %, which can be used even without a calculator. The 1st method. The fastest and most inaccurate (loan Amount * number of years on the loan) * (% of the loan / 2) + 1 to 8 % of the amount received.