Loan repayment schedules are compiled using the Annuity method
Annuity is a loan repayment schedule that involves repaying the loan in equal amounts at regular intervals. The amount of the Annuity payment includes the principal debt and accrued interest on the balance of the principal debt on the loan. This is one of the easiest ways to calculate the payment schedule, allowing you to accurately determine the amount of monthly payments and plan the budget for our clients.
Grace period for principal payment
If a grace period is applied in the loan repayment schedule for paying the principal debt on the loan, this means that during the grace period, only accrued interest on the balance of the principal debt is present in the payment, while the Annuity payment will begin at the end of the grace period.
Effective interest rate
The effective interest rate is the rate that includes all principal and associated payments on a loan (such as fees), thus determining the true cost that the borrower will ultimately pay. It is she who determines the real amount of overpayments on the loan.
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