What is an annuity loan repayment scheme? Annuity method of loan repayment Possibility of choosing a loan repayment scheme: annuity differentiated

Many citizens, when choosing a lending program, carefully analyze all offers on the market and try to choose the best one, but they do not always understand what tricks help the bank earn even more from them thanks to certain debt repayment schemes.

Let's look at the current loan repayment schemes that are currently used in many banks and on what basis monthly payments will be calculated in each of them.

Often, when applying for a loan, clients are given the opportunity to choose the scheme by which they want to repay their debt: annuity or differentiated.

Differentiated repayment scheme

A differentiated loan repayment scheme gives clients a chance to save money when paying an interest rate to the bank for using a loan. At first glance it may seem that this scheme is complex and confusing, but it is not.

Let's figure out what the monthly payment amount consists of when using this scheme:

• principal payment of debt;
• loan interest rate.

Lender banks use a standard scheme - the principal payment is divided by the loan repayment period and an interest rate is added to it. But the differentiated scheme differs from all others in that the interest rate will be charged only on the balance of the principal debt.

This means that the less loan funds remain to be paid, the more noticeable the reduction in monthly payments will be. The financial burden will be noticeable only at the beginning of the payment period, and by the end it will be almost invisible, because the monthly payment will be made up only of the principal debt.

pros

One of the advantages of using this method is that the total overpayment for the entire period of using the loan will be much less than with the annuity repayment scheme.

Thanks to a special formula, you can calculate with an accuracy of one hundred rubles how much you will need to pay monthly and how much the overpayment on the loan will be. Today, there are many financial resources that offer to use, so calculating the amount of debt to the bank will not be difficult.

It is very important to know that this payment repayment scheme will be most beneficial if the client plans to pay off most of the debt at once or pay it off in full, because in this case interest will only be charged on the remaining balance of the debt.

Minuses

Among the disadvantages, it can be noted that in the first months there will be a heavy load on the borrower’s overall budget compared to the annuity scheme, so it is recommended to think carefully before signing the loan papers.

Such a solution will be an excellent solution for those clients who care about their budget and want to get good lending conditions with minimal overpayments. It is also perfect for those citizens who plan to repay their loan early.

Unfortunately, every year banks change their policy for issuing consumer loans and less and less often offer to choose a repayment method and immediately prescribe in the terms of the loan only the one that is more profitable for the bank - annuity.

Annuity scheme for repaying debt to a creditor

It is more understandable for clients and does not require additional recalculations when determining the monthly payment. Before signing the agreement, the bank employee is obliged to draw up a repayment schedule, according to which the client is obliged to make monthly payments.

Annuity loan repayment scheme– this is when the loan is repaid every month in equal shares. The payment includes both the repayment of the total debt to the bank and the interest rate for the use of money.

It is beneficial for the client only because he knows exactly how much money he needs to pay monthly. A fixed payment amount will help you plan your budget more carefully and the load in the first months will be lower than when using a differentiated scheme.

It has a big drawback - a huge overpayment for the interest rate on the loan if the loan term is more than 5-10 years. The longer the period, the greater the overpayment.

In most of these cases, the client may think that he owes the bank less than he actually does. Also, this scheme will be less profitable for those clients who plan to repay early.

This is due to the fact that when paying off most of the debt, the bank will offer to shorten the total loan term, but the monthly payments will remain the same.

What do you need to know about each of them?

Schemes for early loan repayment differ from each other only in how beneficial the cooperation between the bank and the client will be. To understand this, it is advisable to know all the intricacies of calculating monthly payment amounts. This will allow you to more carefully control your loan payments and plan your budget ahead.

One or another repayment method should be selected for each individual case. For example, if this is an ordinary consumer loan for a small term and amount, then it is better to choose an annuity scheme so that there is no confusion between the sizes of the monthly installment.

If this is a long-term loan for a large amount (for example, or a car loan), then it is recommended to choose a differentiated loan, since in this case the total overpayment will be slightly less than with an annuity loan.

It is recommended that before taking out a loan, you must carefully analyze all available offers from banks. Many lenders will not be able to issue a loan if the monthly payment amount exceeds 60% of the client’s confirmed income. Therefore, it is important to plan your expenses and, if this will not greatly burden your budget, contact the bank.

More about the loan

• Duration up to 5 years;
• Loan up to 1,000,000 rubles;
• Interest rate from 11.99%.

More about the loan

• According to the passport, without certificates;
• Loan up to 15,000,000 rubles;
• Interest rate from 9.99%.

Loan from Eastern Bank

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More about the loan

• Duration up to 20 years;
• Loan up to 15,000,000 rubles;
• Interest rate from 12%.

Loan from Raiffeisenbank

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More about the loan

• Duration up to 10 years;
• Loan up to 15,000,000 rubles;
• Interest rate from 13%.

More about the loan

• The solution is instant;
• Loan up to 200,000 rubles only with a passport;
• Interest rate from 11%.

Loan from Home Credit Bank.

Apply for a loan

More about the loan

• Duration up to 4 years;
• Loan up to 850,000 rubles;
• Interest rate from 11.9%.

Loan from Sovcombank.

For many, a loan is the only way to improve their financial situation. Taking out a loan today is not a problem, the main thing is to choose a financial institution and collect all the documents necessary to obtain a loan, but first you need to decide on important issues such as how much you are going to get a loan for and how long you can repay the debt. But this is not all that a borrower needs to know.

When applying for a loan, you may be asked which loan repayment scheme is most convenient for you: annuity or differentiated. Not everyone understands these subtleties and does not know how to answer the question posed. It’s good if you come across a responsible loan expert and can clearly explain the difference between one or another method of repaying the debt, because what is beneficial to the bank is not always beneficial to the borrower.

About loan repayment methods

There are two cash return schemes - differentiated and annuity. Let's look at the first method. The differentiated method of debt repayment includes a mandatory payment and consists of two parts. The first part is the principal debt, it is paid throughout the entire term in equal amounts, and interest is charged on the loan balance for providing you with a loan, so the total monthly payment amount will always be of different sizes.

The largest payment will be the first, and all subsequent funds deposited will be used to reduce it; accordingly, the closer the loan expiration date, the lower the monthly payment amount.

The differentiated payment payment scheme is often used for long-term lending, for example, a mortgage loan. And consumer loans are usually repaid according to the annuity scheme.

Features of the annuity method of loan repayment

In the case of the annuity method of repaying the loan, you will pay the same amount every month; it will be calculated for you when applying for the loan. Before a certain date of each month, you pay exactly the amount specified in the schedule. And this amount throughout the entire loan term will remain unchanged. Simply put, the first and all subsequent payments will be exactly the same, regardless of the remaining amount of debt.

In this method of loan repayment, the accrued interest is first paid, and then the actual amount of the money you borrowed from the bank is returned. This nuance is important when it comes to early repayment of a loan or refinancing. By the way, not every bank provides the possibility of early repayment. To clarify this issue, call the bank and ask if you can do this, and if so, how.

Also ask when you can close the contract and what will be required of you. And one more important point, when your debt is fully repaid - contact the bank to obtain a certificate that you have closed a consumer lending agreement. After submitting all documents to bank employees, the information will be verified and you will be issued a certificate.

Annuity payment formula

In accordance with the annuity payment formula, the amount of periodic (monthly) payments will be:

A = K S

Where A- monthly annuity payment,
TO- annuity coefficient,
S- amount of credit.

The annuity coefficient is calculated using the following formula:

Where i- monthly interest rate on the loan (= annual rate / 12),
n- the number of periods during which the loan is repaid.

Since the frequency of loan payments is monthly, the loan rate (i) is taken monthly. If the interest rate is 12% per annum, then the monthly rate is:
i = 12% / 12 months = 1%.

Using this annuity payment formula, you can find out the monthly amount you need to pay to repay the loan.

Calculation of annuity payment

Let's give an example of calculating an annuity payment.
Let’s say you took out a loan from a bank in the amount of 30 thousand rubles at 18% for a period of 3 years.

Initial data:
S = 30,000 rubles
i = 1.5% (18% / 12 months) = 0.015
n = 36 (3 years x 12 months)

We substitute these values ​​into the formula and determine the annuity coefficient:

Monthly payment amount:

A = K*S = 0.03615 * 30000 = 1084.57 rubles.

Methods of loan repayment, which one to choose so as not to make a mistake?

For a person who does not understand all the intricacies, it is not so easy to decide which scheme to choose; this is a whole dilemma. After all, each of these two methods of repaying a loan has its pros and cons.

If we look at the annuity method of loan repayment as an example, the scheme is simple because the amount of the monthly payment is clear and it will not change, thereby planning your family budget will be easier, whereas differential method looks different. On the one hand, the scheme is more rational; initially you will have to deny yourself something, but then the amount of the monthly loan payment decreases, which is noticeable in financial terms.

If, when applying for a loan, you are given the opportunity to choose your own payment plan for monthly payments, do not rush to answer. Even before the decision apply for a consumer loan, think carefully, and only after understanding this issue, make a decision. Everything is individual and everyone determines for himself what is more important to him. You can choose the differential method and reduce the overpayment on the loan, or you can give preference to the annuity scheme, then debt repayment will be stable.

If you listen to the recommendations of experts, the differential method is suitable for those who save, but there is a small amendment here, this method is suitable for those who have a good stable income, otherwise repaying the debt may turn out to be an unbearable burden.

Banking systems inform the borrower about what interest they will have to pay, and it is up to everyone to agree to such conditions for the loan or not. To avoid trouble, a potential borrower must calculate his financial capabilities before taking out a loan from a bank.

As a rule, two loan repayment schemes are available to the borrower: classic and annuity. With the classic payment scheme, interest is accrued on the balance of the loan; therefore, at the beginning of the repayment period, the monthly payment will be significantly larger than in recent months. With an annuity scheme, the payment amount will be the same throughout the entire loan repayment period, but if in the first months the payment will be dominated by interest, then in the last months the loan body will be the main component. “The annuity payment can be imagined in the form of an hourglass, namely: at the initial stage it consists of a larger amount of interest and a smaller amount of the “body” of the loan; in the middle of the period of use, the amounts of interest and the “body” of the loan have approximately the same value, at the end of the term the opposite picture is observed - the amount of the “body” in the payment increases, and the interest decreases,” explains Tatyana Pototskaya, leading specialist in the department of credit operations with individuals of the All-Ukrainian Development Bank.

What price subtleties should borrowers who are choosing between repayment schemes prepare for?

We study the difference in cost

At first glance, the classic payment scheme is more profitable for the borrower, because the overpayment is less. Let's say two borrowers took out identical mortgage loans for five years at 90,000 hryvnia each at 18% per annum, which is approximately equal to the average real rate on such loans at the moment. In this case, the first borrower chose the annuity payment scheme, and the second - the classic one. In the first months of repaying the loan, the first borrower will have an advantage, because he will pay the loan monthly by more than 500 hryvnia less than the second borrower. However, already at the beginning of the third year, payments will become approximately the same, and in the last months the first borrower will pay more than 700 hryvnia more monthly. In addition, if both borrowers calculate their overpayment at the end of the loan term, it turns out that the one who chose the classic repayment scheme overpaid by almost 6,000 hryvnia (or almost 15%) less.

Even more noticeable (in absolute and relative terms) will be the difference in overpayment as the term and amount of the loan increases.

True, if we take into account the inflation factor, which leads to the depreciation of money, the difference will not be so critical.

Let's assume that our borrowers took out loans five years ago - at the beginning of May 2006. Over the entire period, inflation in Ukraine (according to the State Statistics Committee) amounted to 99.57%. For the borrower who chose the classic repayment scheme, the main payments occurred at the beginning of the loan repayment, when the money he paid was “more expensive”. As a result, taking into account the depreciation of the hryvnia, the first borrower paid 96,260.79 hryvnia under the annuity scheme (overpayment - 6,260.79 hryvnia), and the second, under the classical scheme - 95,667.76 hryvnia (overpayment - 5,667.76 hryvnia). Thus, the difference in overpayment in real figures (taking into account inflation) will be only 593 hryvnia.

In addition to the size of the overpayment, there are other factors that the borrower can focus on when choosing a loan repayment scheme.

What else is important to consider when choosing

The main advantage of the annuity repayment scheme is the fixed payment amount. The borrower does not need to specify the amount he must deposit into the bank every month, and he can plan the family budget in advance. In addition, the annuity is suitable for borrowers with not very high income. Or for those who want to take out a loan for a larger amount. “The annuity scheme for repaying credit debt will be of interest primarily to those borrowers whose income does not allow them to receive a similar loan amount under the classic repayment scheme, since the size of the first payments under the annuity will be significantly less than the first payments under the standard (classical) repayment scheme “- comments Roman Kuspis, Head of Product Development Department of the Bank of Cyprus.

In some cases, borrowers may find other advantages in the annuity repayment scheme: for example, reducing the burden on the borrower in the first months of loan repayment. “Among the advantages, we can also highlight the dependence of the size of the first payment on the day the loan is issued. For example, if you apply for a loan in the middle of the month or at the end of the month, the first payment will be less than subsequent ones. This option is convenient for the borrower in that, as a rule, having issued a loan and paid all the costs associated with its registration, namely: notary costs, costs of insurance payments, costs of registration with the MPEO, etc., the client at first, she may experience some financial difficulties associated with the release of funds,” says Tatyana Pototskaya.

Among the disadvantages of an annuity, in addition to the larger overpayment compared to the classical scheme, one can highlight the inability to reduce your monthly expenses by repaying the loan amount in advance. So if you plan to repay the loan early to reduce the burden in subsequent months, then the annuity scheme is not suitable for you. “Clients need to pay attention to the fact that in most cases, early repayment of a loan does not affect the amount of the monthly payment (it will not decrease), since the amount of early repayment is transferred to the repayment of the last payments according to the loan repayment schedule,” explains Anton Shaperenkov, director of the department marketing of retail business of VAB Bank. At the same time, early repayment of the loan in full with an annuity scheme is, as a rule, possible.

Among the “advantages” of the classic repayment scheme, experts highlight the decreasing size of the monthly payment, as a result of which the burden on the borrower is reduced. This advantage will be beneficial to those who cannot be 100% confident in their future income, especially if we are talking about a long loan period. “This scheme for repaying credit debt is beneficial for those who plan to take out a loan for a large amount and for a long period,” comments Anton Shaperenkov. Also, the classic scheme will be convenient for those whose income differs significantly in different periods, because under this scheme the borrower can repay the loan amount several months in advance, thus reducing the size of the monthly payment during these months. With early repayment, the overpayment on the loan is also reduced, because interest is calculated on the balance of the debt on the loan body.

The main disadvantage of the classical scheme, of course, can be considered the large amount of payments in the first months of loan repayment (especially considering the advance payment and a one-time loan fee). This is especially true for mortgages, because after purchasing a home, as a rule, there is a need for additional expenses for repairs and equipment. In this case, large loan payments can become especially burdensome.

The classic repayment scheme is suitable for those who:

• wants to reduce overpayment on the loan;
• has an unstable income and is not entirely sure of his future income;
• takes out a loan for a long period and a large amount;
• is considering the possibility of reducing the overpayment on the loan and the amount of monthly payments through early repayment of the loan body.

The annuity scheme is suitable for those who:

• is not able to make large monthly payments, especially in the first months of using the loan;
• has a stable income and wants to clearly plan the family budget;
• takes out a loan for a short period;
• is considering the possibility of reducing the loan term by early repayment of the loan body.

Does the borrower have a choice?

In 2011, the classic loan repayment scheme prevails in the proposals of Ukrainian banks. This may be due to the fact that with this scheme, the bank immediately receives most of the money on the loan and has the opportunity to invest it in the future. Thus, for mortgage loans, the classic repayment scheme, according to the Prostobank Consulting company, as of May 16, 2011, is offered by all 26 banks out of the 50 leaders in terms of assets that lend for the purchase of housing. Only 17 institutions have an annuity scheme. For car loans, “classic” ones are offered by 29 banks from 33 institutions that finance the purchase of a car, and the annuity scheme is offered by 24 institutions. The difference is least noticeable in the consumer lending segment. Here, the classic repayment scheme is offered by 24 banks, and the annuity scheme - by 22. At the same time, annuity clearly dominates among cash loans - eight banks offer it, while the classic repayment scheme is offered by only two.

As for the difference in cost, the real rate on loans with a classic repayment scheme is always slightly lower (on average, up to one percentage point) than with an annuity. However, in some cases the difference can be very small - about 0.05 percentage points, for example, for mortgage loans with long terms.

Opinion

Andrey Osipov, Head of the Department for Development and Support of Retail Credit Products at Khreshchatyk Bank

The annuity repayment scheme is beneficial to the borrower when lending for short-term periods (3-5 years), or when initially planned early repayment of a loan issued for a long term. In turn, the disadvantage is a significant overpayment of interest provided that the loan is issued for a long term and without early repayment of the loan.

The disadvantages and advantages of the classical scheme are the opposite of the above arguments. When choosing such a repayment scheme, the borrower must take into account that when applying for the same amount on credit, the initial payments under the classical scheme will be higher than with annuity payments (this should be taken into account when, when calculating solvency, the amount of liabilities to net income exceeds the permissible norm , and the bank can either refuse the loan or reduce the loan amount).

Every second family takes out a bank loan for various purposes. In the modern world this is normal practice.

Few people know that there are two different loan repayment schemes. And even if they do know, they can’t decide which one to give preference to. So, let's figure it out together.

The differentiated scheme provides for a gradual reduction in the monthly contribution. You pay large premiums from the start, but the amount decreases with each subsequent payment. This option is most often chosen in case of long-term lending. For example, when issuing a loan for a home or car.

Interest + fixed portion = payment

In this case, the fixed part is the repayment of the loan body. Interest is defined as (balance * rate)/100%. For example, you received 1,000,000 rubles from the bank. You have 20 years to calculate.

The rate is 12% per annum. The total amount is divided into 240 months, and you receive a monthly fixed payment of 4,166 rubles. The interest rate will always be different.

For example, at month 120, if 50% of the loan is paid, the amount will be calculated as follows: ((500,000 * 12%)/12 months)/100% = 5,000.8 rubles. So, the total payment amount will be 9,166.8 rubles.

The classic version is ideal for those who:

1. Has inconsistent income and is unsure of future income;
2. wants to reduce the amount of overpayment on the loan;
3. considers the possibility of reducing overpayments, as well as the size of monthly payments due to early repayment;
4. takes a large amount for a fairly long period of time.

Most often, this option is offered to mortgage borrowers. In some cases - for consumer loans. Financial institutions with a differentiated loan repayment system are still operating, but, as practice shows, this method is not considered profitable specifically for the bank. Why? Because the total payment amount is lower than other options.

Pros:

• You can always accurately determine the balance of the debt;
• the total overpayment will be less;
• you benefit from paying off your loan early.

Minuses:

1. The first payment is the largest, often unprofitable and unaffordable.

An annuity scheme is more common for most consumer loans. It calculates the full cost of the loan in addition to one-time fees. The entire amount is divided over a certain loan period. Each month the borrower deposits the same amount into the bank account for the entire duration of the agreement.

This method is considered more profitable because it does not cause problems. You, as a borrower, know and remember exactly the payment amount and do not calculate every month how much you need to pay.

(Rate * loan amount) – ((rate + 1) * number of periods) = payment

One month is taken as the period. For the first month, the interest will be equal to the amount ((1,000,000 rubles * 12%) / 12 months)/100% = 10,000 rubles. Total payment amount = 11,000 rubles. Those. for the first month you will pay only 1,000 of the total amount. During the payment process, the situation will change in favor of the loan body.

The annuity option is ideal for those who:

1. Has a stable income and can clearly plan a family budget;
2. cannot make huge monthly payments in the first months of using the funds;
3. wants to reduce the loan term by paying early;
4. takes out a loan for a short period.

First, you pay all accrued interest, and only then return the amount you borrowed from the bank. If you choose long-term loan repayment or refinancing, then this nuance is very important.

Not every bank will provide the opportunity for early payment when using an annuity loan repayment scheme. You can clarify this question in advance.

Pros:

• In the first months, payments will be less than under the classical system;
• the amount will always be fixed.

Minuses:

• The total overpayment for the entire period will be greater than in the classical scheme. And the longer the period, the higher the overpayment;
• Early payments are less profitable;
• payment schedules often do not indicate the breakdown of payments, and many people believe that they owe less than they actually do.

Which option should I choose?

If the financial institution allows you to choose one of two options, weigh the pros and cons. Yes, equal payments make the annuity option more convenient, but the classic method is more rational.

• Monthly payments: with a differentiated scheme, they decrease every month, which means that there are more and more free funds left. But with an annuity scheme, such payments are less burdensome in the first months.
• Credit body: under the classical system, the debt is paid off several times faster. In the second case, the first installments go to pay interest, and the entire amount of debt does not change at all.
• Family budget planning: with the annuity scheme it is simpler, since the amount is always the same and does not need to be further calculated.
• Loan overpayment: in the classic version it is several times lower.

If the main goal is savings, choose a differentiated method. But, if you do not have large savings for down payments, then the annuity option is what you need. Think over and analyze all sides and make a decision.

More about the map

• Duration up to 5 years;
• Loan up to 1,000,000 rubles;
• Interest rate from 11.99%.

More about the map

• According to the passport, without certificates;
• Loan up to 15,000,000 rubles;
• Interest rate from 9.99%.

Loan from Eastern Bank

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More about the map

• Duration up to 20 years;
• Loan up to 15,000,000 rubles;
• Interest rate from 12%.

Loan from Raiffeisenbank

Apply for a loan

More about the map

• Duration up to 10 years;
• Loan up to 15,000,000 rubles;
• Interest rate from 13%.

More about the map

• The solution is instant;
• Loan up to 200,000 rubles only with a passport;
• Interest rate from 11%.

Loan from Home Credit Bank.

Apply for a loan

More about the map

• Duration up to 4 years;
• Loan up to 850,000 rubles;
• Interest rate from 11.9%.

Loan from Sovcombank.

When offering one way or another to repay a loan, the bank is primarily concerned about its own benefit. The monetary expression of this benefit is interest. It is according to the method of calculating and collecting interest that loan payments are divided into annuity (equal) and differentiated (decreasing).

Help website

• Annuity payment- this represents equal monthly tranches spread over the entire loan term. The tranche amount includes: part of the loan debt, accrued interest, additional commissions and bank fees (if any). At the same time, in the first months (or years) of the loan, the majority of the tranche is interest, and the smaller part is the repayable part of the principal debt. Towards the end of the loan, the proportion changes: most of the tranche goes to repay the “body” of the loan, and a smaller part goes to interest. At the same time, the total size of the tranche always remains the same.
• Differentiated payment- this represents unequal monthly tranches, decreasing proportionally over the loan term. The largest payments are in the first quarter of the term, the smallest in the fourth quarter. “Average” payments are usually comparable to an annuity. Every month the loan amount is reduced by an equal share, while interest is calculated on the balance of the debt. Therefore, the tranche amount varies from payment to payment.

Most borrowers, when they come to the bank, worry much more about approving a loan application than about the type of payments. Although some advanced citizens, having heard that you can save on interest and that there is an option to pay less and less from month to month, are interested in the opportunity to get a differentiated payment schedule.

And mortgage borrowers sometimes even specifically look for a bank that is 100% likely to provide such a service. There is a reason for this, given housing prices and the size of mortgage payments, a gradual reduction in payments does not seem out of place. But is it as beneficial as it might seem when you first get acquainted with the topic?

Not for the borrower mortgage

Russian banks are not very fond of differentiated payments, since they imply a certain subtlety associated with assessing the borrower’s solvency (i.e., the ratio of income to the monthly payment).

The fact is that with a differentiated schedule, the biggest burden on the debtor’s budget comes from the first year’s payments, and the ratio to income is calculated specifically for this period.

For example, the borrower indicated in the application form an income of 60,000 rubles, and the first payment under the differentiated scheme will be 25,000 rubles, that is, it will “eat up” almost half of the income. And according to the law, loan payments in any case cannot exceed 50% of income. As a result, banks are forced to lower the maximum loan amount that can be issued based on the declared income level.

The situation is really difficult, both for the lender and for the borrower, since the debtor can either “fall off schedule” or be offended by the insufficient loan amount and go to another bank.

Some borrowers who have taken out a mortgage with differentiated payments overestimate their capabilities and ultimately cannot pay the loan.

Only “monsters” with government support, such as Sberbank, Gazprombank and a number of others, calmly take risks. They can afford to issue “differentiated” borrowers almost the same loans as “annuity” ones. But on average, the differentiated scheme is much less popular, and banks deliberately do not promote it; these are Russian realities.

Annuity payment and differentiated: the difference

Financial experts agree that if the borrower expects to pay off the loan in a short period of time (up to five years), then it is better to give preference to an annuity. However, there is controversy regarding medium- and long-term loans.

For example, if a borrower takes out a long-term loan, say $100,000 for 10 years with a loan interest rate of 10% per annum, then a differentiated payment is more profitable, and significantly more so. In our conditional example, the interest payment for ten years with differentiated payments will be $50,416.67, and with annuity payments - $58,580.88. Accordingly, the overpayment under the differentiated scheme will be less: by $8,447.53.

But let's not forget that the example is conditional, and in practice everything does not look so simple. A number of banking experts do not hide that the idea of ​​a significant financial advantage of differentiated payments is largely a marketing myth. The bank will never miss its profit. It is only important for him to convince the borrower that he can really save by choosing one or another payment plan.

"site" note: The main thing you need to understand is that the method of calculating interest for both forms of payments is the same. In both cases, interest is calculated on the remaining balance of the debt.

Let's count

So what is more profitable? Let's first take a look at two tables: they provide a comparison for a mortgage loan in the amount of 1,000,000 rubles for different terms. Interest rates are approximate and average (the longer the loan term, the higher the interest). We recommend that you first calculate the monthly payment amount and overpayment online using a loan calculator.

Table 1. Monthly annuity payments on a loan of 1 million rubles

Table 2. Monthly differentiated payments on a loan of 1 million rubles

A direct comparison shows that overpayments with an annuity scheme are higher than with a differentiated one, and the longer the loan term, the more noticeable the difference. In other words, if you took out a mortgage for 30 years, then the difference in the “price” of the loans will be 1.29 million rubles - to put it mildly, quite a lot!

But don’t be so quick to shout “Eureka!” and run to the bank to apply for a loan with a differentiated scheme. Yes, a “thirty-year” mortgage with differentiated payments will be cheaper. But tell me, why “sell into slavery” for 30 years, with an interest rate of 15% and a payment amount of 4.5 million, when it is possible to take out a loan for 10 years, with a rate of 14%, and a payment amount of 1.86 million?

If you plan your budget correctly, you will receive complete freedom from credit and own an apartment 20 years earlier. And time is worth more than money.

Let's sum it up

A simple mathematical calculation shows that with a long loan period, overpayments on loans with a differentiated payment scheme are more profitable than with an annuity scheme (since the total amount of payments is less). However, a more thorough study of the issue shows that the superiority of differentiated payment often turns out to be illusory and does not provide real and tangible savings for the borrower (the key word is tangible).

The main disadvantage of the differentiated scheme is the reduction in the maximum loan amount that the bank is willing to issue, based on an assessment of the borrower's solvency. Meanwhile, if you are able to calmly repay the differentiated payment during the first, most “expensive” year, then your income will also be enough to service the annuity scheme. But the maximum loan amount may be higher, the interest rate may be lower, and the loan term may be shorter. That is, the annuity payment has a strategic advantage.

Anastasia Ivelich, expert editor