When applying for a loan at the bank, it will be useful to double-check the calculation of the monthly payment that you have to pay. It is in it that commissions can be laid down that the consultant overlooked or about which he deliberately kept silent. Thus, you can calculate the loan rate and understand at what interest rate you borrow money.
Instructions
Step 1
If you delve into the theory of lending, there are three main forms of loan repayment: annuity payment, loan payment in equal installments and payment at the end of the term. Comparing them with each other at the same interest rate, you can see that the most important parameter - loan overpayment - will be different in all cases. Therefore, first of all, in order to calculate the interest rate on the loan, specify the scheme for the payment. As a rule, in retail lending, as well as in lending for relatively small (by banking standards) amounts, annuity payments are used.
Step 2
On the Internet, you can easily find the annuity formula. It consists of several variables: the amount of the loan, its term and the interest rate to be pledged. Knowing this formula, as well as the principle of calculating interest on the remaining debt, in order to calculate the loan rate, build a corresponding table in MS Excel or another similar editor, similar to the payment schedule that was given to you at the bank.
Step 3
If you don't know MS Excel well enough or just want to save time, find a loan calculator on the Internet. You will need to indicate the amount of the loan, its rate and the estimated duration. As a rule, the loan calculator offers to enter additional parameters of the loan, for example, commissions for issuing and other monthly payments. If you do not know anything about them, leave these fields blank. The calculator will independently make calculations and display the result in the form of a table, based only on the specified percentage. All that remains for you to do to calculate the loan rate is to compare the payment calculation received at the bank with the graph on the computer monitor. If they coincide or differ insignificantly, within the margin of error, then the rate advertised by the bank is real.
