Annuity is a term that has several different values. In the widest interpretation, it can be represented as a tool that serves to implement financial activities.
Several values \u200b\u200bof annuity
For example, the first value that the concept of annuity is one of the types of government loans, and urgent. Such loans can be placed with the condition that interest payments will occur annually, and at the same time a certain part of the loan will be reproached.
At the same time, the annuity is cash payments equal to among themselves and paid to the repayment of obligations on the loan and interest on it. Such payments are made through a certain time interval.
The concept of annuity
Consider the concept of annuity in more detail.
Annuitu, or, as it is also called, the financial meter is a generalized term describing the schedule for which there is a repayment of any financial instruments, moreover, the notion of the annuity implies the payment not only by some part on the principal debt, but also paying remuneration - interest for its use. The main feature of the annuity is that payments in this case are equal to each other and are made through absolutely equal time intervals. Annual graph is quite complicated. It differs significantly from the schedule, which reflects the payment of the amount in full and at the end of the term during which the instrument acted, and from the schedule that reflects the periodic payment is only percent and the process of repaying the amount of the principal debt at the end of the tool. There is a special formula for annute. Let us give it below.
Thus, it can be established that the payment of an annuity type in its structure consists of two parts: a part reflecting the principal debt, and the part reflecting the remuneration for the use credit funds.
Examples of annuity
In very the general sense Under the annuity can be understood not only directly to the financial instrument, but also the actual amount of payment that has a certain periodicity, and the type of graph, which reflects the repayment process.
- Annuity is a state urgent loan of a certain type, according to which the annual payment of some part of the principal debt and interest is for the use of the loan itself.
- Cash payments equal to each other, the payment of which is assumed at equal time intervals. Moreover, such payments are included in the amount going on to the repayment of a part of the principal debt, and the amount coming to pay interest.
- The concept of annuity is also used in insurance, in particular, during life insurance. In this case, it means an agreement that an individual concludes with an insurance company. A similar agreement provides a physical person to obtaining regular payments upon the occurrence of previously agreed time. For example, after retirement.
- Annitut graph can also be used to accumulate to accumulate to a certain point monetary sum. At the same time, it is supposed to make equivalent contributions to the deposit account, which is accrued by remuneration.
Types of annuities
Annicates can be classified into two types, depending on the time when the first payment is paid:
- If the payment is carried out at the end of the first period, then such an annuity is named postnamerando.
- If the payment is carried out at the very beginning of the first period, then such an annuity is called Penumrando.
Nevertheless, the annuity is most often - this is a certain way to return credit funds. Therefore, in this article we will concentrate on this meaning of this concept.
To date, only a small part of Russian banks prefers to use another loan repayment scheme. The use of the Annortition method allows the bank to receive guaranteed profits. This is due to the fact that the annuity schedule is built in such a way that the bank first return interest for the use of credit funds, and only then the loan body is paid, that is, the amount of the principal debt.
Annuita formula
The formula for which the annuity is calculated is quite complex. Its record has various views.
One of them: pi \u003d (S * PR / 12) / (1 - 1 / (1 + PR / 12) N), in this formula:
- PL - represents directly annuity payment itself.
- S is the total amount of credit funds.
- PR - loan used interest rate or annuity ratio.
- N is the total number of periods during which repayment will be made (months are most often used).
Her functions
It is worth noting that throughout the term the amount of payment does not change, but the structure is significantly different from the structure of another, the same payment. The payment made in the first month of repayment mainly consists of the amount of interest, and payments that are manufactured by the end of the payment term are mainly consisting of the amount going on with the repayment of the loan. This is where cash flows.
In order to determine which structure it has a certain payment, it makes sense to use this formula. It clearly reflects the percentage that is included in it. To make this calculation, it is necessary to take the balance by the amount of the main debt and multiply it to 1/12 part of the annual loan rate.
An example of a clearly reflective method for calculating annuity
The formula that we led to above will be much clearer if we use it in practice, disagreeing the corresponding example.
Suppose the bank's client issues a loan. The loan amount is one hundred thousand rubles, the term of granting - 12 months, the interest rate on the loan in this case is 24 annual percent. In accordance with the formula, it is possible to calculate what the current value of the annuity will be:
(100000 * 0,24/12)/(1 - 1)/(1 + 0,24/12) 12 = 2000/0,2115 = 9457.
Thus, it is precisely such an amount, in the amount of 9457 rubles, a monthly client will have to transfer to the bank in order to repay the loan taken.
100000 * 0,24/12 = 2000.
It turns out that in the composition of the first payment of 9457 rubles, only 2000 rubles will be deposited on the payment of interest on the loan. Accordingly, the amount of 7457 will go to the repayment of the principal debt.
After performed the first payment, the amount overall debt It will decrease and will be 92543 rubles:
100000 - 7457 = 92543.
From this amount, you can make a percentage calculation for the next, second, credit payment:
92543 * 0,24/12 = 1851.
So, in the second payment included interest in the amount of 1851 rubles and the main debt is 5606 rubles.
This method is calculated for each payment for the entire loan period.
Automatic payment calculation method
Undoubtedly, it is quite difficult to produce such calculations. The formula for calculating the annuity can be useful only to understand the principles of its calculation. As for practice, it does not make sense to consider payments using the calculator. Modern technologies allow you to automate the calculation process without any problems, which makes the cash flow management process easier.
When the client draws out a bank loan, then a credit institution will make a printout for him, reflecting all annuity data. It will reflect all the necessary data: the amount of payment, the date, when payments should be made, as well as the payment structure with the reflection of the amount of interest and the amount of the principal debt for each payment.
In addition, on the Internet you can find a special calculator. It will be enough to make such data as the total loan amount, its term, the rate. After that, the calculator will instantly make an appropriate calculation of the annuity and displays all the information you are interested in: the amount of payment that will have to make every month and the approximate loan repayment schedule.
This calculation allows you to produce such office programlike Excel. This program provides a feature called PPT - it will help calculate the size of the annuity. But, unfortunately, with this method of calculation, an approximate repayment schedule cannot be obtained.
Pluses annuity
The annuity method is not always profitable for the client, although it is convenient. When using the annuity, confusion will not occur with the size of the payment and the term of its application, because the annuity always has a fixed amount of payments that should be made monthly. This method will avoid the need to contact the bank every month in order for its employees to make the calculation of another payment.
This method is convenient if the borrower has a low-level income.
An alternative scheme called Differential, assumes a monthly recalculation of the amount of payment. This has to be done because with such a scheme every month there is a decrease in the amount of the principal debt, respectively, and interest for using a smaller amount has to pay less. That is, each subsequent payment will be less than the previous one. However, the first payments with such a scheme are obtained very high, and this may not afford not to each borrower.
Disadvantages annuity
During the first half of the term, which is issued a loan, payment in its structure mainly contains interest. That is why the annuity scheme is very profitable for banks. The loan repayment is prematurely best in the first half of the term, since then it does not have a practical meaning, because most of interest has already been paid. Repayment of the loan early in the second half of the term will not benefit the borrower because cashMounted on the repayment of interest on the loan will not return.
Annuity indicators
In the event that the annuity is considered from the point of view of the lender, and not a borrower, then it is necessary to assess payments to the possibility of analyzing income.
Few people can use the estimates of this kind in everyday life. However, when analyzing and comparing current costs and cash receiptswhich will happen in the future they are necessary.
There are two main indicators, with the help of an annuity assessment. This cost is modern and future.
The future value of the annuity is the amount of absolutely all elements that constitute an annuity. This also includes percentages that are accrued at the end of the term. Elements, or, as they are also called, the members of the annuity are those equivalent payments.
This indicator can be used if it is required to calculate the amount of the deposit (replenished), which will be able to accumulate to a certain time, if you carry out the regular contribution of funds under a certain interest rate.
Modern (current) cost is a set of annuity elements that are reduced at the time when its implementation has begun. This indicator is used to assess the feasibility of investing in a certain contribution, which should bring constant and regular income. That is, this estimate allows you to calculate whether future income will be higher than the price of the asset itself.
By the way, this assessment can be used in order to evaluate what it will be more profitable - make a purchase on credit or pay it immediately.
The loan is issued on the terms of further return to the Bank. Moreover, together with the repayment of debt, the borrower must pay interest rates. Despite the importance of the last parameter, no less important in determining the level of overpayment is the method of accrualing payments. It should be understood what is the difference between different loan repayment forms and how to calculate an annuity loan payment.
Repayment of loan debt
In 2016, the total amount of the debt on the loan exceeded 10,000 billion rubles. Most of the banking organizations discusses the conditions for the return of funds taken before their issuance. There are two main forms of repayment of debt on loan:
- differentiated payments;
- annuity payments.
Although most of the borrowers when choosing credit Program draws focus on size interest rate And on the basis of this parameter, it selects the optimal loan, the method of accrual interest and repayment of the loan also plays a big role in its final value.
Differentiated payments are more profitable for the borrower. In the case of a similar way to return funds, the client simultaneously repays the "body" of the loan and the interest rate. Due to this, monthly payments will decline every month, because with each month interest is accrued to a smaller amount (the loan body decreases with each subsequent payment).
For obvious reasons, this form of calculation has a number of positive features. First, the client immediately begins to pay the body of the loan. Secondly, at the same time there is a repayment of interest rates. Thirdly, thanks to a gradual decrease in debt based on the body of a loan, and not percentage, the ultimate cost of such a loan is lower than in the case of annuity loans. But since banking organizations Interested in obtaining as high income as possible, they most often apply an annuity payment schedule.
Annuity plates
In the case of differentiated payments, the borrower immediately begins to repay the body of the loan. The smaller the funds should be a bank, the smaller the amount of interest rate is numbered. This is unprofitable to a financial institution, since it is precisely those funds that compete by paying interest are the main source of income of such organizations. In the case of annuity payments, the situation looks different.
An altitude loan involves repayment of debt equal parts (which is not with differentiated credit). A positive feature of such a form of payments is the possibility of monthly making a small permanent amount. With a differentiated loan, the client must immediately contribute more money, But over time, payments on the loan are reduced. Since not all citizens have the opportunity to allocate a large amount of money from their budget, annuity loans are greater popular among the population.
There is a good reason why financial institutions also prefer annuity loans. With this lending form, the borrower returns the means to equal parts, but at the first time a significant part of the money goes to repay interest on the loan, and not a loan body. The calculation of annuity payments on the loan is made in such a way that the client immediately makes funds to the interest payments, and only a certain part of the payment takes on the repayment of the loan itself, which increases with time.
Since in the first period a significant part of the funds goes to repay the interest rate accrued to the loan balance, the final cost of the loan will be higher than with a differentiated loan. The reason for this is the slower repayment of the body of the loan from which interest is accrued.
How to calculate the amount of payment
As mentioned earlier, the annuity form of payments provides for a monthly transfer of the bank of the same amounts. At the same time, the payment itself can be divided into two main parts:
- The first part goes to repay interest on loan. The size of this part is gradually decreasing, closer to the expiration date.
- The second part is used to return the "body" of the loan. With the annuity form of payments, this part gradually increases, reaching his peak closer to the end of the loan repayment.
To figure out how to make the calculation of annuity payments on the loan, it is necessary to bring the formula. Below will be considered the formula for calculating the amount of payments, as well as the definition, which part of the product goes to the payment of interest, and which is directly on debt repayment.
Formula for calculating satisfied complex. It takes into account many parameters, some of which are unfamiliar to the usual ordinary client financial institutions. It looks as follows.
The figures shown in the formula are indicated:
- MP - a monthly loan payment;
- SZ - the total amount of funds taken off;
- MPS. - monthly interest rate;
- SC. - Loan term (number of months) When interest on it is accrued.
The formula for calculating an annuity payment on the loan, as already mentioned, quite complicated. In order to calculate everything, you will have to use a calculator. To better understand how to calculate this parameter, a specific example should be given.
An example of calculating an altitude payment
In order to make a calculation, you need to know the total amount of the loan, interest on it, the monthly interest rate and the total period for which a loan is issued. In this case, the following parameters will be used:
- The loan amount is 40 thousand rubles.
- The rate is 22% per annum.
- The term for which money is taken is 2 years (that is, 24 months).
Before using the formula, you must set the value of another parameter - a monthly interest rate. This is done as follows:
MPS \u003d Annual interest rate / 100/12.
In this case, the size of the monthly interest rate will be as follows:
22 / 100 / 12 = 0, 0183.
The calculation of the loan with annuity payments with such parameters is as follows:
40 000 x (0.0183 / (1 - (1 + 0,0183) -24)).
After all the calculations, the following amount will be obtained - 2075 ruble 13 kopecks. It is so much money to the client will have to pay monthly to closing a loan.
Knowing the final amount of payment, it is easy to calculate how much money will be overpayed after its final payment. To do this, you need the amount obtained earlier, multiply by credit:
2075 * 24 \u003d 49 803 rubles. The final overpayment will be: 49 803 - 40 000 \u003d 9 803 rubles.
How to facilitate settlement
Since manually perform calculations is quite difficult, you can use the functionality excel programsIncluded in Microsoft Office from Microsoft Corporation. Among the functions prescribed in it, there are "PLT"With which you can make the necessary calculations.
The procedure for action is quite simple. You must create a new table and in any empty cell to register the following formula: "\u003d PPT (22% / 12; 24; -40 000) » . In this case:
- "\u003d PLT" - Function.
- 22%/12 - the size of the annual interest rate.
- 24 - Loan term.
- -40 000 - loan amount.
Sign «=» Before the beginning of the formula is of great importance. Without it, the program will perceive the introduced as simple text and will not make calculations. All parameters must be entered in the order in which they are indicated above. Between them must be a point with a comma. Failure to comply with these rules may result in error during computing. After entering the data, you must press the Enter key.
The program will make a calculation and give out the result that will correspond to the amount obtained in the previous example. Using Excel can significantly reduce the calculation time and facilitates the work of the borrower. However, there is an even easier way to calculate a monthly payment.
Today, the Internet contains a large number of online calculators, with which you can make an appropriate calculation. It is enough to enter the necessary data (the amount of the loan, its deadlines and interest rate), after which the operation is performed. The automatic system will independently calculate both the size of the monthly payment and the total amount of payments along with the recipiency level.
Deduction of funds that will go to the repayment of interest rates
The borrower can also independently calculate the amount of funds that are charged to the percentage payments. To do this, you need to use a special formula. It is much easier than the previous one. How to calculate interest on the loan in annuity payments? It is necessary to multiply the amount of funds that still need to make (that is, the current amount of debt on the loan) for a monthly interest rate.
As an example, it is worth calculating which part of 2075 rubles (the size of the monthly payment obtained earlier) is spent on the interest rate payment at the first payment. In this case, the following formula applies:
- SZ (loan debt amount) x MPS.
Since the payment will be the first, the debt at the time of its introduction will be 40,000 rubles. Accordingly, from 2075 rubles for the payment of interest goes: 40 000 * 0,0183 \u003d 732 rubles. In the second payment: 38657 (Debt at the time of the work of the second payment) * 0,0183 \u003d 707 rubles.
Having received this data, the borrower can easily calculate which part of the debt to the bank is indeed repaid during the payment. To do this, it is enough from the amount of the payment to take away the part that goes to interest. After spending this action, the borrower will receive the result - 1343 ruble (2075 - 732). With the second payment in accounting of the debt's body will leave 1368 p. (2075 - 707).
Accordingly, in the first transfer of funds, despite the introduction of 2075 rubles, the net debt (without interest rate) will decrease only by 1343 rubles and will be 38,657 p. After another month, the amount of debt will decrease to 37,289 rubles. Over time, more funds will be released on the repayment of the body, and the interest rate is less.
Such an approach to calculations allows the Bank to calculate the interest rate with more thanrather than with differentiated payments. This, accordingly, increases the amount of funds, which will eventually be listed in accounting interest, and stretches in terms of the duration of the repayment of the principal debt. That is, a citizen not only splits more money as a interest rate, but also does it for a longer period of time.
Should I agree to the annuity loan repayment
Such a form of repayment has its advantages. As it was already said earlier, the client will have to repay the loan by monthly listing small sums. Since in most cases the bank appeal individualswho are not able to highlight a large amount of funds from family budgetAnnuity payments can reduce the financial burden on a citizen.
Meanwhile, an example of calculating an altitude payment on the loan, which is above, shows that in this case the borrower significantly overpays. When parameters used in the example, the final cost of the loan will exceed the cost of funds taken by approximately ten thousand rubles, which is unprofitable for the borrower.
Differentiated loan is accompanied by not such a big overpayment. For this reason, he looks much more attractive. However, it is necessary to be prepared for large first loan payments (in some cases, multiplying exceeding the size of the listings during annuity payments).
Thus, there are two main forms of calculating loan payments: differentiated and an auitate. The second form assumes a monthly contribution fixed amount. It allows you to reduce the financial burden on the borrower, but is accompanied by significant overpayments on the loan. The formulas given above will give the borrower to pre-calculate all the necessary data and decide on the feasibility of taking an annuity loan.
25.12.2018, Sasha Bukashka
Annuity loan payment is such a way to repay a loan, in which the amount of monthly payment remains constant during the entire lending period.
When we take a bank loan, we know that they are obliged to return the amount of the amount received within a certain period and pay interest on the loan. The loan can be repaid by annuity and differentiated payments. We offer you in detail to familiarize yourself with these loan payment schemes (it may be consumer, and car loan, and mortgage, and credit card). Consider them in detail to own full information before we take a loan in a bank or microfinance company.
What is an annuity loan payment
In addition to banking specialists, few people know what an annuity payment means. The concept of annuity payment is revealed, for example, in paragraph 2.2 of the concept of development of the mortgage housing system in Russian Federation, approved by the Decree of the Government of the Russian Federation of January 11, 2000 No. 28.
Annuity loan payment is monthly paymentwhich consists of two parts. One part of the payment amount is a complete percentage payment accrued to the balance of the principal debt, and the second is part of the most principal debt. The amount of monthly annuity payment is calculated in such a way that with a fixed interest rate all the monthly payments were the same for the entire period of action. loan agreement. At the same time, during the period of action, a share towards repayment of the principal debt grows in the period of the annuity payment, and the share aimed at paying interest is reduced.
The amount of monthly annuity payment is calculated according to the scheme that may not be easy to understand at a glance. First calculates the annuity coefficient by the formula:
- i - a monthly interest rate on the loan, which is equal to 1/12 part of the annual interest rate (for example, if the interest rate is 12% per annum, then the monthly rate: i \u003d 12% / 12 months. \u003d 1%);
- n - the number of months during which a loan is paid.
Then the amount of monthly annuitent payment is calculated:
- A - monthly annuity payment;
- K - annuity coefficient;
- S - loan amount.
Of course, there are special software in banks to calculate payments, but also the usual borrower armed with a calculator, our article and a patience, will be able to cope with the calculation. However, on the Internet you can find special online calculators that will easily cope with the task and calculate the loan repayment schedule for annuity payments.
Differentiated loan payment
Differentiated loan repayment method means that the borrower pays monthly payments over the term of the loan agreement different size. First, the amount of payment is more, then it gradually decreases.
The differentiated payment is made up of a solid, predetermined amount constituting a part of the principal debt, and percent over it.
The amount of differentiated payment is calculated according to the following formula:
- D - the amount of the differentiated payment;
- S - loan amount;
- n is the number of months during which a loan is paid;
- Sp - the amount of interest.
What loan is better: annuity or differentiated?
As we have convinced, both types of loan payments consist of two parts: the amount sent to the repayment of the loan itself (principal duty), and the amount sent to pay interest. Each of the loan repayment methods has its advantages and disadvantages.
Credit agreement with the condition of annuity payments Provides a borrower with a long time to repay the debt to the bank smaller in terms of equal payments (the usual scheme when). The financial burden on the loan per person in this case is distributed evenly for the entire period of the lending agreement. At the same time, there is a gradual repayment of both the principal debt and percentage. However, percentage of annuity payments, the overall overpayment is greater, since the borrower pays more than with differentiated, because the amount of the principal debt decreases slower.
Differentiated loan payment More profitable for the borrower from the point of view of the final amount of interest. But it may be less convenient, since the initial payments are much more followed, especially with long credit periods. And this means for a borrower a large financial burden in the initial period of the loan.
As a rule, banks in contracts mortgage lending Annual loan repayment scheme is used. This is explained not only by the greater benefit for the bank (he will receive more percent), but also the convenience of calculations, because payments are always the same, it is easier to control.
We can not give you, dear readers, advice that specifically choose - the fact is that the borrowers still have no right to choose which scheme is to pay a loan, but perhaps such a proposal will soon appear, and deputies will make appropriate changes to legislation And this choice will be.
Clearly make sure that there may be the difference in payment schedules at two different methods Credit repayment is possible on the example. Suppose we take mortgage in the amount of 5,000,000 rubles for a period of 5 years (60 months) under 12% per annum (not counting initial contribution). Payment schedules on this loan will be such:
Differentiated payment
| Payment No. | Amount of payout | Main debt | Interest charges | Debt residue |
| 1 | 133 333,33 | 83,333,33 | 50 000,00 | 4 916 666,67 |
| 2 | 132 500,00 | 83,333,33 | 49 166,67 | 4 833 333,33 |
| 3 | 131 666,67 | 83,333,33 | 48 333,33 | 4 750 000,00 |
| 4 | 130 833,33 | 83,333,33 | 47 500,00 | 4 666 666,67 |
| 5 | 130 000,00 | 83,333,33 | 46 666,67 | 4 583 333,33 |
| 6 | 129 166,67 | 83,333,33 | 45 833,33 | 4 500 000,00 |
| 7 | 128 333,33 | 83,333,33 | 45 000,00 | 4 416 666,67 |
| 8 | 127 500,00 | 83,333,33 | 44 166,67 | 4 333 333,33 |
| 9 | 126 666,67 | 83,333,33 | 43 333,33 | 4 250 000,00 |
| 10 | 125 833,33 | 83,333,33 | 42 500,00 | 4 166,666,67 |
| 11 | 125 000,00 | 83,333,33 | 41 666,67 | 4 083 333,33 |
| 12 | 124 166,67 | 83,333,33 | 40 833,33 | 4 000 000,00 |
The balance of debt by the end of the first year of payments on the loan will be 4 million rubles.
Annuity payment
| Payment No. | Amount of payment | Main debt | Interest charges | Debt residue |
| 1 | 111 222,24 | 61 222,24 | 50 000,00 | 4 938 777,76 |
| 2 | 111 222,24 | 61 834,46 | 49 387,78 | 4 876 943,30 |
| 3 | 111 222,24 | 62 452,81 | 48 769,43 | 4 814 490,50 |
| 4 | 111 222,24 | 63 077,33 | 48 144,90 | 4 751 413,16 |
| 5 | 111 222,24 | 63 708,11 | 47 514,13 | 4 687 705,06 |
| 6 | 111 222,24 | 63 345,19 | 46 877,05 | 4 623 350,87 |
| 7 | 111 222,24 | 64 988,64 | 46 233,60 | 4 558 371,23 |
| 8 | 111 222,24 | 65 638,53 | 45 583,71 | 4 492 732,70 |
| 9 | 111 222,24 | 66 294,91 | 44 927,33 | 4 426 437,79 |
| 10 | 111 222,24 | 66 957,86 | 44 264,38 | 4 359 479,93 |
| 11 | 111 222,24 | 67 627,44 | 43 594,80 | 4 291 852,49 |
| 12 | 111 222,24 | 68 303,71 | 42 918,52 | 4 223 548,78 |
The balance of debt by the end of the first year of the loan payments will be 4,223,548 rubles 78 kopecks.
Annuity payments - one of the types of repayment bank credit. The essence of the method is to repay the debt equivalent amounts throughout the term of the loan agreement. In this case, the amount of the remaining debt does not matter.
The monthly payment, as a rule, includes accrued interest, as well as the body (the amount of the main debt). If you are offered a calculation scheme by annuity payments, know that a total of a few more. But such a system has one undeniable advantage - it is more accessible to the average borrower than differentiated payments.
Credit annuity payment schedule
Annuity payments are made every month. The regular amount of payment does not change throughout the term of credit. If you do not belong to particularly scrupulous borrowers who recheck the correctness of the arithmetic interest and write-off of the debt, the ordinary annuity calculator on the lender website will be enough to present the future repayment scheme. To verify the interest rate on annuity payments, some organizations offer to use the so-called reverse credit calculator.
How to calculate an annuity loan payment
The following formula is used to calculate:
x \u003d s * (p + p / (1 + p) n -1)
Values \u200b\u200bare decoded as follows:
x - Monthly loan payment;
S is the total loan amount;
P - twelfth part of the interest rate:
N - the number of months.
There is also a formula for which two parts of the loan are calculated - to repay accrued interest and on repayment itself. But for the use of this tool requires special mathematical knowledge. To recheck your own credit, the above example is quite enough.
Credit repayment by annuity payments
Annuity payments are presented to beneficial borrower, if we are talking about short-term loans, no more than 3-5 years, as well as in cases where early repayment scheduled in prior order.
If you make a loan with annuity payments for a longer period - high overpayment percentage is inevitable.
The disadvantage of the differentiated payment system is considered higher amounts of the first contributions.
What is an annuity payment on the loan
Despite certain advantages for the borrower, the annuity repayment scheme is beneficial primarily for the credit institution. When paying equal parts, interest is charged each time on the starting amount of the loan. If the bank offers a differentiated rate, pay the percentage of total amount We'll have only in the first month, all subsequent payments will gradually decrease, since the percentage payable is recalculated every month from the amount of the outstanding body of the loan. Banks I. credit organizations It is often offered annuity loans within certain shares or special proposals.
Tip from Compare.ru: in relations with the bank you should take care of your own benefit. Therefore, try to use all the possibilities for issuing a loan with a repayment system in the form of differentiated payments. Considerate the annuity loan, only if there is no alternative. And do not forget to measure your financial opportunities Before making any loan.
