Currently, the list of services for lending to individuals provided by banks is constantly growing. The demand of citizens for these services is also increasing. It is quite natural that when applying to a bank for a loan, a potential borrower is interested in the size of the monthly payment.
Instructions
Step 1
The loan payment will depend on several parameters: interest rate, loan terms, method of interest accrual (monthly, quarterly or at the end of the loan period) and repayment order (differentiated or equal payments).
Step 2
Repayment of a loan in equal installments (annuity payments) is a fairly common method of payment. This is such a payment, in which the amount of the payment remains unchanged throughout the entire crediting period. It includes the amount of principal and interest. This method of repayment is convenient in the case of a large loan, for example, on a mortgage, since the first payments will be less than with differentiated repayment. But it should be remembered that with annuity payments, the overpayment for the entire loan period will be greater, since the size of the principal debt, on which interest is charged, will decrease more slowly than with differentiated repayment.
Step 3
You can calculate the loan payment as follows: loan amount * 1/12 of the annual interest rate / (1- (1+ (1/12 of the annual interest rate)) to the degree (1 - loan term, in months)). For convenience, it is better to use the Loan Calculator program, with which you can calculate the monthly payment amount and the final overpayment.
Step 4
With differentiated payments, calculating the monthly payment is much easier. In this case, the amount of the principal debt is the same every month, i.e. the main debt is divided in equal shares by the number of months of lending. The amount of interest payable will decrease every month, since it is charged on the balance of the principal debt. The amount of interest can be found as follows: the amount of the balance of the principal debt must be multiplied by the interest rate (in shares), by the number of days in the current month and divided by the number of days in a year.
