The repayment schedule and its importance for the course of the loan.
A loan is usually repaid in installments.
These rates usually consist of an interest component and a repayment component.
A repayment schedule helps you keep track of how interest and repayments behave over the long period of the loan.
Term of the loan is. The plan shows the serial number for year (starting with 1) as well as the loan amount, the annual installment, the interest portion, the repayment part and in the last column the remaining amount at the end of the year.
In the following year, this sum is again shown as the loan amount in the first column of the next line and so on. In this way, the customer can quickly see how their debt is reduced from year to year, the interest portion shrinks annually and the repayment part of the rate increases.
- In order to ensure that repayments are made evenly, it is important to pay the installments constantly. If there are payment difficulties, the repayment plan can change.
According to Article 247 § 6 EGBGB (Introductory Act to the Civil Code), the borrower must be informed in contracts for consumer loans that he is entitled to a repayment plan. In the area of real estate financing, a repayment plan must be available as soon as a fixed interest rate has been agreed.
Calculator must enter.
The result is a detailed plan. The necessary data and numbers are:
- the desired loan amount
- the interest rate (in% pa)
- the amount of the rate
- the number of installments per year (usually monthly)
- Use our free and SSL certificate-protected repayment calculator to create a repayment plan easily and securely.
The repayment schedule can be drawn up using these numbers. The following example serves for a better understanding, in which the loan amount amounts to 20,000 USD, which carries an interest rate of 5%. The monthly rate is set at 500 USD.
This would result in the following repayment schedule:
|year||Debt level of the previous year||Installment payment||Interest portion||Redemption share||Debt level (new) year-end|
|1||$ 20,000.00||$ 6,000.00||$ 883.81||$ 5,116.19||$ 14,883.81|
|2nd||$ 14,883.81||$ 6,000.00||$ 622.06||$ 5,377.94||$ 9,505.87|
|3rd||$ 9,505.87||$ 6,000.00||$ 346.91||$ 5,653.09||$ 3,852.78|
|4th||$ 3,852.78||$ 3,924.27||$ 71.49||$ 3,852.78||$ 0.00|
|Total amounts||$ 21,924.27||$ 1,924.27||$ 20,000.00||$ 0.00|
In addition to these values, the repayment plan also shows how long the customer will need to repay the entire loan. A comparison of different loan providers is worthwhile and the repayment plan calculator helps to find the best offer for the desired loan.
Annuity loan decides, can first find out with our home loan calculator how a higher rate affects the course of the repayment plan. Experts believe that the customer is better off at a higher rate due to the resulting interest advantage than if he makes special repayments.
A repayment plan is also an advantage because it offers a high degree of planning security. You can see at a glance how long it will take to repay a loan.