In the last decade, Russia has seen active development of the banking sector. Loan programs are being developed for individuals, under which attractive conditions are established. Currently, every Russian who uses borrowed funds to solve financial problems is forced to learn the basics of banking in practice.
What does the loan amount include?
In 2008, the Central Bank issued a Resolution that obligated all banks operating in the Russian Federation to notify each borrower at the initial stage of drawing up an agreement about the full cost of the loan. Despite this requirement, some financial institutions continue to treat their clients dishonestly, sometimes forcing them fraudulently to pay hidden fees and unreasonably high interest rates. To protect themselves from scammers and preserve their savings, Russians must be well versed in all the nuances of lending.
The total cost of the loan is formed from many components:
- the amount of the loan issued;
- interest accrued for the entire period of the loan;
- commissions (for consideration of the application, for the production of bank plastic, for issuing cash);
- monthly fee for loan servicing, etc.
Employees of financial institutions calculate the full cost of loans in the form of annual interest. This value directly depends on the tariffs established by the bank, loan terms, frequency of monthly payments, but does not include the amount of penalties and interest for late fulfillment of obligations by the client.
Insurance premium and other hidden fees
Today, most Russian banks strongly recommend that potential borrowers take part in insuring their solvency and life. Thus, financial institutions protect their financial interests from all kinds of risks. When an insured event occurs, they return their funds in any case, and therefore willingly lend to people who have accepted such conditions.
Attention! Most often, insurance policies are required for those credit programs that are issued without proper verification of the clients' integrity: quick loans; passport loans; cash loans; unsecured loans, etc.
In addition to the imposed insurance, potential borrowers may encounter hidden fees, which, as a rule, they learn about already in the process of repaying the loan. Their contracts may include:
- commission for issuing a loan;
- commission for early loan repayment;
- fee for additional services, etc.
Early repayment
Each client of a financial institution participating in lending plans to fulfill its obligations as quickly as possible, thereby saving on paying bank interest. Some lenders are loyal in this matter and allow borrowers to repay loans early. But there are also those banks that force their clients to pay for the desire to quickly repay their debts.
In order not to find themselves in a difficult situation, borrowers should be aware of several nuances of early repayment of loans:
- Restrictions set by the bank in relation to early payments. Many financial institutions prohibit clients from repaying loans early in the first few years.
- Some lenders apply interest rates not to the remaining balance, but to the original cost of the loan.
- There are established deadlines for making monthly payments.
- In addition to the main payments, loan funds are distributed.
How is the interest rate on a loan calculated?
To independently calculate the interest rate on a loan, potential borrowers can use special formulas, or use a virtual calculator posted by almost every bank on the website. If an individual can understand the intricacies of such calculations, then it will be much easier for him to communicate with the creditor and present his compelling arguments to him.
To calculate interest, you need to use three indicators:
- rate (interest);
- loan amount;
- loan terms.
This video tells you how to independently double-check the loan interest calculated by the bank. Borrowers will be able to use the video as a teaching aid, thanks to which they will learn how to carry out calculations that are difficult at first glance.
Annual percentage
The annual interest on a loan is a value that can be calculated and expressed in different ways. As a rule, it includes the totality of all overpayments on the loan that the client is forced to make within 1 year. This value is expressed as a percentage of the amount of the loan issued. It may change downward during loan restructuring.
The annual interest rate includes all kinds of payments, commissions and contributions, and allows the financial institution to resolve the following issues:
- Create a profitable repayment model for clients.
- Conveniently return your funds.
- Provide borrowers with conditions for accurate and timely fulfillment of financial obligations.
- Develop a clear monthly payment plan.
Attention! Microfinance organizations do not use annual interest rates when making calculations. In most cases, interest on such microloans is accrued daily, on the amount of funds used by the borrower.
How to calculate interest on a loan correctly?
In order to avoid mistakes when calculating interest on a loan, borrowers should know one important nuance - the formula involved directly depends on the type of monthly payment. Today, credit institutions offer their clients the opportunity to repay debts in two ways:
- Annuity payments are fixed amounts that do not decrease throughout the life of the loan.
- Differential payments are amounts that borrowers are required to pay monthly, changing downward each time.
The formula by which loan interest is calculated
To calculate interest on loans, the following formulas are used:
Before applying for a loan program, even in the most reliable Russian bank, a potential borrower needs to think carefully, study all the conditions, and give a realistic assessment of his financial capabilities. In the process of studying loan offers, individuals can independently calculate the interest that will be accrued on a particular banking product. Such calculations will allow you to choose the most profitable loan from a financial point of view.
Counting your own money is not a sign of suspicion, but a healthy approach to business. Calculate how and in what amounts you will repay the loan so that, if necessary, you can competently present your arguments to the lender.
The rapid growth in the popularity of all types of lending over the past decades has forced bank clients to understand the basics of banking. At the very least, the consumer should know everything that concerns their own funds invested in a bank deposit or borrowed (credit) funds borrowed from a bank in detail, since a healthy distrust of other people’s opinions regarding one’s own money is a positive trait.
So, suppose you took out a loan and, naturally, you want to clearly understand how and in what amounts you will repay it. You can, of course, use the services of bank calculators, of which there are plenty on the Internet. But, firstly, the network is not always at hand, and, secondly, let’s remember the main thing: you should not only know everything that concerns your money. You must understand this so that, if necessary, you can competently present your arguments to the creditor.
So, the “three pillars” of any bank loan:
- The amount of the loan issued by the bank;
- Loan repayment period;
- Loan interest rate.
The amount of interest on the loan is determined from the balance of the amount that remains to be repaid, multiplied by the loan interest for the term in relation to the year. For clarity, let’s look at calculating the amount of interest on a loan using a specific example. Suppose the bank provided a loan in the amount of 12,000 rubles for one year at 20% per annum.
If the loan is not repaid throughout the year, then the amount of interest will be 2,400 rubles. (20% of 12,000 rubles). However, banks, as a rule, provide for loan repayment in monthly equal installments in loan agreements. The amount of interest in this case is determined monthly from the remaining loan amount after repayment.
For example, loan repayment begins on January 1. January has 31 days. The amount of interest on the loan for January will be 12,000 × 31 × 0.2 / 365 = 203.84, where:
- 12,000 – the amount of the unpaid part of the loan at the time of interest calculation;
- 31 – number of days in a month;
- 365 is the number of days in a year.
So, in January we must pay the bank 1,000 rubles of the actual credit part (“loan body”) and 203 rubles. 84 count interest on the loan.
Accordingly, in February the loan payment calculation will look like this:
11,000 × 28 × 0.2 / 365 = 168.77 rubles, where
- 11,000 – the remaining portion of the loan amount after 1,000 rubles were paid in January;
- 28 – number of days in February;
- 0.2 – interest on the loan (20%);
- 365 is the number of days in a year.
The full payment amount for February will be 1,000 rubles (“loan body”) and 168.77 rubles. interest on the loan. The following months are calculated similarly. Some banks prefer an average monthly interest payment on the loan. Then the entire annual interest amount is added up and divided by 12 (the number of months in a year). The average amount of interest is the same and is paid monthly along with the “loan body”, remaining constant throughout the year.
Sometimes, when you need, in the absence of a calculator, to very quickly calculate the amount of interest on a loan, you can use the following methods:
Fastest and most approximate
Loan amount x number of years on the loan + half the interest on the loan + 1–8% of the resulting amount. We take into account that the longer the term, the lower the percentage that should be added. In the example we have already considered earlier, the calculation will look like this: 12,000 × 1 × 20 / 2 = 1,200, to which another 8% should be added
More accurate and labor-intensive
We determine the monthly repayment amount of the “loan body” (in our example it is 1,000 rubles), add to it the amount of the entire loan and divide by 2 (12,000 + 1,000) / 2 = 6,500. Multiply the resulting number by the number of years on the loan and for interest rate: 6,500 × 1 × 0.2 = 1,300 rubles
You can make calculations easier by using a mobile phone calculator. However, if you are interested in lending, be sure to take into account possible additional conditions of the bank, which can often significantly (sometimes more than the interest rate for the loan) increase the amount received by the bank from the borrower.
Most often, they are presented as a fee for servicing a loan agreement and can be paid either one-time with a certain percentage of the loan amount, or monthly, although sometimes both are required. To avoid unexpected additional costs, be sure to carefully study all the terms of the loan agreement.
Today, most citizens resort to applying for credit products. Banks are becoming increasingly popular. A citizen with an average income has definitely applied for a loan at least once or intends to receive one.
There are more and more loan offers, because financial institutions are developing projects for different categories of the population. But each bank sets its own lending conditions.
And how can you decide on your own where to turn? How to calculate a loan yourself? Loan payments can be made using an online calculator.
Also, the loan amount and monthly payments can be correctly calculated in Ixelle by entering all the necessary data. With knowledge of the formulas, you can easily calculate a consumer or mortgage loan. At the same time, you can compare the calculations.
How to calculate a loan yourself?
How much will you still have to pay? This question is of concern. Calculating monthly payments is not difficult.
The formula for calculating the monthly payment is classic. The main nuance when calculating is the deduction of all commission fees and payments and taking into account only the main indicators.
What indicators are required to calculate the monthly payment?
To calculate the monthly payment in the Excel book, you need to take the exact loan amount, the time period of the loan and the discount interest. After calculation, the potential borrower sees the exact picture of the payment schedule, sees the value of the interest overpayment and the entire cost of the loan.
What is the purpose of performing calculations in the Ixelles book? This is a simple check of the issued data using a loan calculator. After calculations, you can determine whether there are any hidden fees that the financial institution included in the monthly payment, but did not notify the client.
Financial institutions want to earn as much as possible from the consumer of their own services, so they practice this all the time.
Basic terms every consumer should know
| Term | Description |
|---|---|
| 1. Payment schedule | The payment schedule includes the amount of monthly loan payments. The amount of the monthly payment includes the annuity payment, the amount of accrued interest, the amount of the principal debt, the remaining amount of the debt, the total amount of overpayments and the total amount of all payments. Additional services that will be added to the payment can also be displayed in the payment schedule. Additional services can be separately allocated, or they can immediately be included in the composition. |
| 2. Payment per month | Monthly payment – the minimum payment amount, which consists of the amount of the principal debt, accrued interest, insurance and additional services. Most often, payment is calculated using the annuity method; less often, financial institutions agree to the differentiation method. |
Calculation of payment per month
When taking out a loan for consumer needs and a mortgage, the client must take into account the following formula:
Payment using the annuity method = Loan size * ((i*(i+1)^n)/(1+i)^n-1), where:
- n – loan period,
- i – discount interest on a loan.
In the book Ixel the consumer is offered special formula:
PLT ( Accounting interest/12; time period of lending; loan amount).
Below we give an example of calculation using all methods. So the conditions:
- Lending period – six months .
- Issue size – 100,000 rubles.
- Accounting interest – 18%.
Using an online calculator, the monthly payment comes out 28591.01 rubles. Taking into account the PMT formula, the same amount is obtained - 28591.01 rubles. Using the first formula listed very first, the following comes out:
Payment per month = 100000 * ((0,18*(0,18+1)^6)/((1+0,18)^6)-1).
Payment per month = 28591.01 rubles.
According to calculations, it turned out that by all methods we get the same answer. But this doesn't always happen. In addition, the calculation using the formula may yield a slightly different value. This is achieved by rounding to whole numbers.
How to build a payment schedule?
To build a credit payment schedule, you need to create a table in Excel with the following columns: payment date, payment amount, principal amount, accrued interest, remaining amount.
To enter dates automatically, you first need to enter the first ones yourself. 2 dates, and then stretch with a cross for the required period ( in this case for 6 months). 6 dates coming out- With 01.02.2018 By 01.07.2018.
How to independently calculate the amount of accrued interest?
Video
Calculation of accrued interest:
Interest =(Principal debt * % * calendar days in a particular month) / (100 * 365(366)).
Calculation of the amount of principal debt
We calculate the principal debt as the difference between annuity payments and accrued interest.
Formula
Principal debt = Amount of payments using the annuity method – accrued interest.
Calculation of the amount of remaining debt
It is calculated as the difference between the loan size and the principal amount paid for the month.
Formula
Residual debt = Loan amount – principal debt per month.
In the second month, the calculation procedure is similar, but instead of the entire amount of the loan, we enter the remaining amount of the principal debt. The previous calendar date minus the current calendar date gives the number of days in the period.
It happens that this happens when there is still an amount remaining after the last payment. Due to such circumstances, financial institutions may overestimate the amount of the last payment or, conversely, underestimate it.
Conclusion
Results may vary between financial institutions. This is absolutely normal. Each financial institution uses its own calculation principles. The legality in such actions is respected.
Therefore, you can ask the employee for their own calculation formula to make the calculations, as well as make a comparison of the obtained data. Financial institutions may have a special approach to calculating the date or take into account weekends.
Greetings! I am sure that I do not have to know and be able to do everything in the world. Yes, this is impossible in principle. But in the most important areas for a person it is worth navigating at least at the “teapot” level.
I consider work, business, family, health and, of course, money to be vital areas. What am I getting at? Moreover, any investment requires. Even if it’s a banal bank deposit or a loan for business development.
To be honest, I haven’t done such calculations manually for a very long time. For what? After all, there are a lot of convenient applications and online calculators. As a last resort, a “fail-safe” Excel table will help out.
But it doesn’t hurt to know the elementary formulas for basic calculations! Agree, interest on deposits or loans can definitely be classified as “basic”.
Below we will recall school algebra. It must be useful at least somewhere in life.
We calculate the percentage of the deposit amount
Let me remind you that interest on a bank deposit can be simple or complex.
In the first case, the bank accrues income on the initial deposit amount. That is, every month/quarter/year the depositor receives the same “bonus” from the bank.
Of course, the calculation formulas for simple and compound interest differ from each other.
Let's look at them using a specific example.
Return on deposit with simple interest
- Amount % = (deposit*rate*days in the billing period)/(days in the year*100)
Example. Valera opened a deposit in the amount of 20,000 rubles at 9% per annum for one year.
We will calculate the profitability of the deposit for a year, month, week and one day.
Interest amount for the year = (20,000*9*365)/(365*100) = 1800 rubles
It is clear that in our example, the annual profitability could be calculated much more simply: 20,000 * 0.09. And as a result, you get the same 1800 rubles. But since we decided to count according to the formula, then we will count according to it. The main thing is to understand the logic.
Interest amount for the month (June) = (20,000*9*30)/(365*100) = 148 rubles
Amount of interest for the week = (20,000*9*7)/(365*100) = 34.5 rubles
Amount of interest per day = (20,000*9*1)/(365*100) = 5 rubles
Agree, the simple interest formula is elementary. It allows you to calculate the return on a deposit for any number of days.
Return on deposit with compound interest
Let's complicate the example. The formula for calculating compound interest is a little more sophisticated than in the previous version. The calculator must have a power function. Alternatively, you can use the degree option in the Excel table.
- Amount % = contribution * (1+ rate for the capitalization period) number of capitalizations - contribution
- Rate for the capitalization period = (annual rate*days in the capitalization period)/(number of days in a year*100)
Let's return to our example. Valera placed the same 20,000 rubles on a bank deposit at 9% per annum. But this time - .
First, let's calculate the rate for the capitalization period. According to the terms of the deposit, interest is accrued and “added” to the deposit once a month. This means that we have 30 days in the capitalization period.
Thus, the rate for the capitalization period = (9*30)/(365*100) = 0.0074%
Now we calculate how much our contribution will bring in the form of interest for different periods.
Interest amount for the year = 20,000*(1+0.0074) 12 – 20,000 = 1,850 rubles
We raise it to the power of “12” because the year includes twelve periods of capitalization.
As you can see, even with such a symbolic amount and a short period of time, the difference in the profitability of a deposit with simple and compound interest is 50 rubles.
Interest amount for six months = 20,000*(1+0.0074) 6 – 20,000 = 905 rubles
Interest amount for the quarter = 20,000*(1+0.0074) 3 – 20,000 = 447 rubles
Monthly interest amount = 20,000*(1+0.0074) 1 – 20,000 = 148 rubles
Note! Capitalization of interest does not in any way affect the profitability of the deposit for the first month.
The investor will receive the same 148 rubles with both simple and compound interest. Differences in profitability will begin from the second month. And the longer the deposit term, the more significant the difference will be.
Before we stray too far from the topic of compound interest, let's check how fair one of the recommendations of financial advisors is. I mean the advice to choose not once every six months or quarter, but once a month.
Suppose our conditional Valera placed a deposit for the same amount, term and at the same rate, but with interest capitalized every six months.
Rate = (9*182)/(365*100) = 0.0449%
Now we calculate the return on the deposit for the year.
Interest amount for the year = 20,000*(1+0.0449) 2 – 20,000 = 1,836 rubles
Conclusion: all other things being equal, semi-annual capitalization will bring Valera 14 rubles less than monthly capitalization (1850 - 1836).
I understand that the difference is very small. But our other initial data is symbolic. For large amounts and long periods, 14 rubles will turn into thousands and millions.
We calculate the percentage of the loan
We move from deposits to loans. In fact, the loan calculation formula is no different from the basic one.
Example. Yuri took out a consumer loan from Sberbank in the amount of 100,000 rubles for 2 years at 20% per annum.
- Amount % = (debt balance*annual rate*days in the billing period)/(number of days in a year*100)
Interest amount for the first month = (100000*20*30)/(365*100) = 1644 rubles
Amount of interest for one day = (100000*20*1)/(365*100) = 55 rubles
Note! Along with the balance of debt, the amount of interest on the loan decreases. In this regard, the differentiated scheme is much “fair” than the annuity scheme.
Now suppose our Yuri has repaid half of his loan. And now the balance of his debt to the bank is not 100,000, but 50,000 rubles.
How much will his interest burden decrease?
Monthly interest amount = (50,000*20*30)/(365*100) = 822 rubles (instead of 1644)
Amount of interest for one day = (50,000*20*1)/(365*100) = 27 rubles (instead of 55)
Everything is fair: the debt to the bank has decreased by half - the “interest” burden on the borrower has decreased by half.
Do you calculate interest on loans and deposits for yourself? Subscribe to updates and share links to fresh posts with your friends on social networks!
Zapsibkombank, like most modern financial institutions in Russia, provides its clients with a ready-made calculator for calculating monthly loan payments, which uses several standard formulas for calculations.
Nevertheless, it is beneficial for any consumer to know and be able to independently recalculate the interest on the loan. After all, in this way the client has the opportunity to check the correctness of the numbers that are so important to him.
Positioning itself as an honest, transparent financial structure that works exclusively for the benefit of clients, Zapsibcombank provides you with information that allows you to understand in detail all the nuances of lending. We will teach you how to quickly calculate your monthly payment when using a loan.
How to independently cope with the calculation of interest on a loan?
When planning to take out a loan from the Bank, you must initially correctly calculate your own strengths. It is important to remember that the amount of money you overpay for using a loan directly depends on the rate of debt repayment. In other words, the faster you are able to repay the loan, the lower the total amount of interest accrued by the Bank will be.
To find out the correct calculated amount of interest on the loan, you must consider the following data:
- The amount (amount) of the loan received;
- Amount of annual interest rate;
- Selected type of debt repayment: annuity or differentiated loan payment system;
- Planned number of days to use the loan.
Important!
A differentiated loan payment system is a system in which the monthly loan payment is constantly decreasing, since the generated payment consists of a certain portion of the loan body and interest accrued strictly on the remaining amount.
The annuity system of loan payments is characterized by the uniformity of monthly payments. In this case, a fixed monthly payment is made up of a certain (changing) share of the loan body and interest that is accrued for the use of the money received.
It is quite clear that the calculation of interest on a loan will be slightly different for different repayment systems.
Calculation of interest on a loan subject to the choice of a differentiated payment system
The monthly payment under a differentiated loan repayment system usually consists of two parts:
- A fixed amount that allows you to repay the loan in equal parts;
- The constantly decreasing part, which represents the amount of interest accrued on the loan balance.
The fixed monthly principal repayment amount is calculated by dividing the loan amount by 12 months. Further, to calculate monthly interest, the system of differentiated loan payments involves the use of a simple interest formula.
SNP=(OOZ×PS×KDM)/(100×365),
where the amount of accrued interest (SNP) is equal to the quotient of the numbers obtained by multiplying the balance of the principal loan (PLO), the interest rate (IR), the number of days in the selected month (KDM) and the product of one hundred percent and the number of days in the year (365 or 366).
Since the amount of the principal debt will constantly decrease by the amount of the previously paid base part of the loan, the amount of interest accrued by the bank will also decrease monthly.
For example, a client was given a loan of 48,000 rubles for one year with a differentiated debt repayment system at 10% per annum. The fixed amount of repayment of the principal amount of the loan will be 4,000 rubles (48,000/12=4000). In this case, the monthly loan amount will decrease by exactly 4,000.
In the first month, the client’s payment will be – 4,000 (repayment of the loan principal) + 407.67 (48,000*10*31/100*365)=4,407.67. In the second month – 4,000 + 361.64 (44,000*10*30/100*365) = 4,361.64. Third month – 4,000 +339.73 (40,000*10*31/100*365) 4,339.73 and so on.
Calculation of interest on a loan subject to choosing an annuity payment system
Annuity is the name given to the system of repaying debt in equal installments. In other words, with an annuity loan repayment system, monthly payments do not change during the entire period of using the loan.
The monthly payment under such a loan repayment system also includes two components:
- The amount of interest for using the loan;
- A certain portion of the loan body.
The classic formula for calculating interest on a loan with an annuity repayment system is as follows:
SEP=(PSK ×GPS/12)/(1-〖(1/(1+G PS⁄12))〗^(KP-1)),
where SEP is the amount of the monthly payment;
PSK – primary loan amount;
APR – annual interest rate;
KP – the planned number of loan payments for the entire period of using the loan.
For example, a client was given a loan of 48,000 rubles for one year with an annuity system of debt repayment at 10% per annum. The monthly payment amount (SEP), in this case, will be:
What is more profitable: annuity or differentiated repayment?
Each loan payment system has certain advantages and disadvantages. That is why the client always has to choose a loan repayment system, weighing and correlating all the pros and cons that are relevant for a particular situation.
On the one hand, the total overpayment on the loan under the annuity system of debt repayment turns out to be greater than under the differentiated scheme. But, on the other hand, with a differentiated system, the primary credit load (the first few months of using a loan) is significantly higher than with an annuity.
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