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.
Advice 2 : How to recalculate interest on loans
Monthly recalculation of interest on the loan is only in the case if feature differentiated payment. In annuity payment allocation is subject to increase or decrease in interest rates, the Bank is obligated for the two months prior to notify the customer to renew the contract and recalculate.
You will need
If your client's line of credit with differentiated form of payment, you are obliged to immediately calculate the monthly payment amount and specify it in the payment schedule.
The recalculation of the interest rate of the loan with differentiated form of payment must be made in the case, if the client makes a greater amount than specified in the payment schedule of loan repayment. For example, you granted a loan of 100 thousand rubles at 12% per annum for one year. The first month of repayment the interest rate will be calculated from 100 thousand roubles and will amount to 1200 rubles. Total payment for the first month of loan repayment will be equal to 8333+1200=9533 ruble. After making the first payment, the interest rate charged on the remaining loan amount and so monthly. As repayment of the loan the amount of interest will decline.
If your customer makes a monthly basis, not amount specified, and arbitrary, you must recalculate the remaining amount of debt interest. To do this, from the principal amount of the loan, deduct the total amount of payments made and the remaining numbers to calculate percentages.
Decorated in annuity payments the amount of the monthly loan repayment will be equal, regardless of what in fact paid the monthly payment. Calculate the monthly repayment amount using the loan calculator: http://www.helpkredit.com/zaemwiku/kalkulyatoru/annuitet.php. At the initial stage of repayment of the loan the interest will be much higher than the amount of the payment. As payment the amount of interest repayment is reduced, and the amount of principal repayment increases. But all this is reflected in the internal graph.
Make a recalculation in the event of an increase or decrease annual percentage rate. To increase or decrease the interest you can only from the time of contract renewal. For consumption consider only the remaining amount that is not paid by the client. To charge more or less interest on the entire outstanding loan amount you are eligible under any form of payments.
Advice 3 : How to determine interest rate on loan
The main issue of concern to the borrower is how much he will eventually have to pay the Bank for using its funds. The declared interest to the uninitiated often do not reflect the real picture. Effective interest rate (EPS) can exceed the stated 2-3 times.
The formula for calculating EPS suggested the Central Bank regulation No. 254-P as amended on 1.07.2007 G. Despite the complexity of the above calculations, the users of the computer, particularly Microsoft office, is a great advantage. Excel financial functions is the formula for calculating the net internal rate of return. In the English version it's XIRR, in Russian – "chistendom".
In the letter No. 175-T, dated 26 December 2006, the Central Bank clarifies how to calculate the examples. The effective interest rate on the loan can be calculated only on the basis of specific data. This is the sum of the initial contribution, the date of issuance of the loan, its term, payment frequency and basis of their calculation.
Example 1. The terms of loans as follows:- ∑ the loan – 12 660 rubles;- payment type – annuitant; - interest rate – 29%; - the maintenance fee is 1.9% of the loan amount per month;- loan term – 12 months;- the date the loan – 17.04.2012.
The effective interest calculation you can maintain after the Bank will provide a table of repayment of the loan. It create in Excel a table similar to that depicted in Table 1. According to the logic of the common man, the overpayment will be 4959,16 rubles, and this is only 39,17% per annum. However, the effective interest rate will be about 90%. To obtain this figure, in cell F19 following the procedure below: "Insert" - "Function" - "Financial" - "chistendom". The argument "Value" select entire column "Amount of payment" in addition to "total" in the argument "Date" is the entire column "Date of payment". The argument "Predp" (estimated return of investment) can be omitted. So, the effective interest rate in this case will be 89,78% per annum.
Example 2. The source data is the same, but the Bank will charge a lump sum Commission in the amount of 1.9 percent per year. Accordingly, the repayment of the loan will have a somewhat different (see Table 2) 12660 x 1.9% x 12 = 2886 roubles. This amount will display in the column amount of payment: to the original -12660 add 2886. Get -9774. You will immediately see that EPS will increase to almost 124%!
Example 3. The Bank offers the loan without a fee for maintaining the loan account. It would seem that in this case the stated rate should be effective. But everything is not so simple. Instead of the declared 29% APR you get of 33.1%. The Bank cheated you? Not at all. Function "chistendom" default puts the expected yield of 10% per annum. It turns out that the Bank receives a monthly payment amount, taking into account its reinvestment. And let the simple inhabitant is difficult to understand why in the end he will pay more than stated, the Bank's actions legitimate.
Before signing the agreement, the Bank shall not be obligated to furnish to its borrower size EPS. For this reason, to compare loan offers of different banks is very problematic.
The fees for maintaining the loan account could be found illegal in court.