Loans allow you to get what you want and at the same time you do not need to save up for years, for example, for a car of your dreams, an apartment, a trip, household appliances and much more. After all, you can simply come to the bank and borrow the required amount of cash. However, it is necessary to take into account how much you can overpay for such a pleasure.
It is necessary
- - paper;
- - a pen;
- - loan agreement.
Instructions
Step 1
Take a loan agreement and see how much money you borrowed. Write this value down on a piece of paper. Then look at what amount of money, along with interest, you will have to return to the bank, and also write this numerical value on your paper.
Step 2
Subtract in the loan agreement or look in the payment schedule for how long you took this loan. Further, in order to calculate the annual interest rate on this loan, subtract the amount of cash that you borrowed from the total amount of funds, together with interest. After that, divide the resulting value by the loan term (in years) and multiply by 100%. The interest received will be the annual rate of the loan you borrowed.
Step 3
Calculate the annual interest rate on the loan in a different way. To do this, add up all the loan payments taken from the loan schedule. Then add to them the amount of the commission if you paid it, for example, when issuing cash. Also, if you took this loan on the bank's payment card, you can add the annual service for using the card to the amount received. Next, multiply the amount received by the interest rate on the loan, which should be indicated in your agreement.
Step 4
Divide the resulting value by the loan term and multiply by 100%. Do not be alarmed if you get a large interest - this is the so-called "effective" interest rate on your loan. That is, it is this percentage that you will pay to the bank for using its funds.
Step 5
Pay attention also to the fact that you may have been connected to the insurance service when applying for a loan. If you have insured a loan, then you also pay a certain percentage for this service. Read carefully the loan agreement, especially the information that is spelled out in small print.
