When applying for a loan, you must carefully analyze the terms of the debt obligation. You should especially pay attention to whether you have the ability to pay monthly amounts to repay the loan. These payments are determined by the amount of the loan, the term, interest rates, as well as the method of calculation that is accepted by the bank.
Instructions
Step 1
Collect complete billing information. To calculate monthly payments, you will need the loan amount (K), the annual interest rate (P), the maturity (C) and the payment scheme. The last parameter is set by the bank's policy for the given credit program. Payments can be annuity or differentiated. In the first case, the amount of monthly payments will be the same, and in the second, decreasing.
Step 2
Calculate monthly differentiated loan payments. This calculation method is quite simple. First, you need to divide the loan amount by the maturity.
Step 3
As a result, you will receive the body of the loan, which will be repaid every month. Then determine the monthly interest, which is equal to the debt minus the body paid multiplied by the interest rate divided by 12 months. Add interest to the body and get the total monthly payments.
Step 4
Determine the monthly annuity payments for the loan (A). The calculation formula is quite complex and may differ in different banks, so check in advance how this value is calculated. As a rule, the following formula is used: A = K × (N × (1 + i) ^ C) / ((1 + P) ^ C - 1). The amount of repayment of the loan body and interest is difficult to determine in this case, and basically these values are determined by the bank.
Step 5
Use loan calculators to determine your monthly loan payments. You can find this service on many sites on the Internet, but if you want to get the most accurate information, then refer to the calculator that is posted on the website of your bank. It is enough to enter the data on the loan, select the repayment method and click the "Build a schedule" button. As a result, you will receive a table in which not only monthly payments will be scheduled, but also the amounts for repayment of the loan, and the amounts related to interest.
