A rare man today cannot borrow. But for some, it is the only way to provide housing for yourself and your family, and for others it is a way of denying various pleasures, including a new car, elegant shoes or a road trip. In any case, the loan is part of our life and it would be good to understand how to calculate the loan installments. Is it possible to do it at home? Or do you have to be a specialist?
Over the past decade, the credit market has grown rapidly and lending to individuals has become particularly popular. It is logical that people’s financial literacy has increased slightly. In fact, it is right that people started saving their money and thinking about where to spend it. I had to plan my cash flows and imagine what funds would have been paid out on loans. The secret is that the availability of credit makes you forget the feeling of reality. This means that a person always has a certain balance of funds in stock, whether it’s a credit card or a quick loan. In addition, advertising promises to promise that your wallet will always have money for new clothes or car covers. The pink veil will disappear later when it is time to count.
Before you decide
Yes, you have to decide on a loan! Can you find the money for a monthly payment? And do you really need the thing you want to take money for? You have to consult your family members and of course not take the first loan you see. Offers vary from bank to bank and can sometimes be beneficial for your category. For example, an acceptable percentage may be offered to pensioners, students or young families. It is worth considering the possibility of force majeure, which simply will not be money to pay the loan. Many banks meet customers and offer debt restructuring. Agree, confidence is added when emergency escape routes are devised. Of course, you can calculate the loan payout in advance. For example, Best Bank provides such an opportunity online.
In the process of solution
How to calculate loan repayments? And why is it necessary if the bank can do everything alone? For full confidence in service transparency, payment structure and the absence of hidden charges. Preliminary calculations can be done at home, with a calculator, pen, and a sheet of paper at hand.
Annuity payments are the most popular in credit practice. The amount is the same for the entire duration of the loan contract. Such a payment consists of two parts: cash that goes directly to pay the loan and interest on the amount of the debt. Until the very end of payments, the amount remains unchanged, but initially, it was dominated by interest and until the end – the main debt. And how to calculate repayments of this type of loan?
Until the day
However, when the loan agreement is drawn up, the plan is drawn up for certain days and therefore the annual rate is converted to a daily rate, ie divided by the number of days per year. In this case, the value of n increases. When calculating monthly and daily rates, the difference is small, only a few dozen rubles, but can also bear weight. If you own a table design, you can build an analog bank payment up to one day.
So we can introduce another concept of “Differentiated Payment” to the interview. What is it and how to calculate repayments of this type of loan? The differentiated payment is therefore different in that it decreases towards the end of the credit period and is mainly based on credit debt and the remainder being a percentage of the balance.
To avoid incorrect calculation
Even if you calculate the prepayment of a loan, for example, Best Bank may suddenly surprise you with this amount because it will include the debtor’s insurance. Or the percentage may be more loyal if there are bonuses in the calculation. For example, a lower rate may be for bank employees. Sometimes it is worth giving up insurance if, for example, the loan is short and the cost of insurance is not justified. But in a situation where a mortgage is issued, the insurance is compulsory and the debt can be written off in the event of the main debtor’s ability to work.
The situation with the most honest behavior of lending organizations, but also happens that banks behave incorrectly. For example, you still find links to interest-free loans, which unfortunately do not exist! This is because all document fees and commissions are recorded in the “Other fees and commissions” column. In addition, bank employees sometimes offer extremely adverse credit conditions and hope for insufficient customer information. When considering how to calculate your monthly loan repayment, you should request a printout of several selected banks to compare fees and charges, and also choose the most transparent loan option. I must say that under these conditions differentiated payments are often more favorable and the calculation using the annuity method is very specific and expensive.