Menghua recently received a call from a bank saying that it could provide a loan amount of 300,000 yuan, with a loan term of 3 years, a monthly repayment of 9,000 yuan, and a loan service fee of only 2.67% ((36*9000-300000)/3/300000=2.67%). Menghua was a little moved when she heard this, but she discounted 9,000 yuan per month at a discount rate of 2.67% to . The calculated present value is very different from 300,000 yuan.
Monthly repayment of 9,000 discount
This is a relatively common installment interest rate trap. If you calculate it roughly using a personal loan calculator, the actual interest rate is about 5.07%, which is nearly twice the 2.67% claimed by the bank.
This is because in the case of installment payment, the principal of the loan has been lowered, but the interest has not decreased with the decline in principal, so the actual loan interest rate is higher than the service fee rate mentioned by the bank.
interest is the time value of the currency. Different repayment methods are directly related to the actual capital cost. Let’s take a look at the interest rate calculation methods of several common repayment methods.
1, equal principal and interest
equal principal and interest repayment refers to repaying the principal and interest of the loan at an equal amount each month. In the above case, the equal amount of principal and interest payment is paid. If you repay on a monthly basis, the interest rate calculation method is:
(P/A,i,n)=Total loan/monthly repayment
(P/A,i,n) is the annuity present value coefficient. Similar numbers can be obtained by looking up the table and then calculated by interpolation.
calculation is relatively complicated and can be calculated directly through the online loan calculator.
2. Interest payment in installments, principal payment and interest repayment upon maturity
interest payment and interest repayment upon maturity, refers to the payment of interest on a monthly or quarterly basis, and the principal payment is one-time repayment upon maturity. The interest rate provided by financial institutions is generally the quotation rate, that is, the nominal interest rate of , , rather than the actual interest rate. For example, the quotation interest rate is 8%, and the interest rate is paid quarterly, and the quarterly interest rate is 2%, and its actual interest rate is (1+2%)^4-1=8.24%.
3, discount method,
discount method, refers to the interest payment method that is collected in one lump sum when loan interest is released. For example, Company A borrows 1 million yuan, with a quotation interest rate of 10%, and an interest rate of 100,000 yuan. Since the actual loan principal is 900,000 yuan, the actual interest rate is 10/(100-10) = 11.11%.
In addition to the above three repayment methods, there are also various other loan models in reality, such as charging handling fees, equal principal, etc. In any way, you can calculate the rate of return (IRR) in , which is the discount rate when the present value of cash inflow is equal to the value of cash flow. ∑Cash inflow/(1+IRR)^m = ∑Cash outflow/(1+IRR)^m.
Loans are becoming more and more common in business activities and personal life, while finance is becoming more and more complex. Before lending, understand the terms, calculate the actual interest rate, and choose the repayment method reasonably to avoid falling into the trap of interest rates.
