Categories: Licensed Money Lender Singapore | 0 comments

When dealing with the interest of borrowing money, which one offers the lowest rate? Licensed Money Lender Singapore or bank? Through our website, we always strive to provide an interest rate that can compete with other money lenders. Our five years of experience did not satisfy us, so we continued to look for ways to satisfy our customers. To find out more about the loan we offer you can visit our website.

Then, how does the bank determine its interest rate? When you apply for a loan to a bank, you will definitely consider several things in advances such as the type of interest offered, the amount of interest, and the amount of instalment you will pay later. How to calculate loan interest is not widely known by the public. When actually knowing how the calculation of interest on the loan is no less important if you will apply for a loan to a Bank.

In general, there are three types of loan interest calculations for all loan products that are flat rate calculation, effective interest rate calculation and interest rate annuity calculation.

– Flat rate is the easiest loan interest calculation. Using flat interest calculations, you will pay the same principal and interest instalments each month. This calculation is usually used to calculate interest on an unsecured loan or unsecured credit. The interest rate of the flat also called a fixed rate where the credit ceiling and the amount of interest will be calculated in a balanced manner according to the loan period.

– Effective Interest Rate

The effective interest rate calculation, also known as sliding rate, is a loan interest calculation performed at the end of each instalment period. Credit interest is calculated from the final balance of each month. Interest is calculated based on the principal amount not paid by the borrower. That way the amount of interest each month will vary according to the principal amount that has not been paid.

– Interest Rate Annuity

The calculation of the annuity interest rate is a modified form of an effective loan interest calculation. It aims to facilitate the customers in paying monthly instalments. The calculation of interest on this loan determines the amount of monthly instalment with the same amount but the composition of interest and the principal of the instalment will vary each period. The monthly interest rate will decrease but the principal instalment will be enlarged. This interest calculation makes the portion in the beginning of the loan becomes very large but will gradually shrink in the end of the loan.