All Questions
Tagged with loans interest-rate
84
questions
16
votes
10
answers
9k
views
Fair interest rate on $2k personal loan to a friend
A friend wanted to borrow $2,000 from me and he promised that he would pay it back in a month. I'm about to lend him the money. How much interest should I charge that would be fair? I am not expert ...
- 161
1
vote
1
answer
87
views
Confusion with payment calculation for fixed payments on fixed interest loan
I'm trying to understand how to calculate the monthly payments on a fixed interest loan with a given term. I understand this can be done with the PMT excel function.
Whenever I see this explained ...
- 13
0
votes
1
answer
73
views
Loan: calculate number of monthly payments with fixed annual interest, fixed montly payment, and 1 additional payment per year
The situation is the following. Consider a loan of 430,000 units (dollars or whatever).
The client will pay 10,000 units per month.
The client will pay an additional 70,000 units every 12th month of ...
- 111
14
votes
3
answers
7k
views
Which mortgage should I pay off first? Same interest rate and mortgage length
tl;dr:
I have two amortized mortgages; one big and one small.
The conditions (interest rate and mortgage length) are exactly the same.
Which should I pay off first?
I have always heard that you ...
- 143
7
votes
4
answers
3k
views
How to compare loan interest rate to savings account interest rate?
I don't understand how to compare my loan's interest rate to my savings account interest rate.
My savings account states:
The Interest Rate on your account is 4.0249% with an Annual Percentage Yield ...
- 173
8
votes
7
answers
6k
views
When is it worth taking out a loan for something I could pay in cash?
I'm trying to better understand the time-value of money and how to compare interest rates vs. investment returns.
In general, if I can pay for something in cash or short-term credit (paid off monthly),...
- 287
18
votes
5
answers
8k
views
I have to pay back my student loan. When is the best time to do it?
Today, I received the news that my "Payback phase" for my student loan has begun. I was afraid this day would come soon, but it came quicker than I anticipated. However, I got the news that ...
- 313
21
votes
9
answers
6k
views
What would be a recommended interest rate for an unsecured loan to individuals with mediocre credit rating and income close to expenses?
I have a friend whose new wife is paying an absurdly high interest rate on her auto loan. They've asked if I was willing to loan them money at a more reasonable rate to pay off that loan and have ...
- 1,206
1
vote
5
answers
993
views
What’s the real benefit of taking loan when interest rate is lower than inflation
This question is particularly regarding taking out a loan for a specific purpose, let’s say buying a car.
I understand that when taking out a loan when inflation is high and interest rates are low you ...
- 111
1
vote
2
answers
148
views
Is this a weekly compounding loan amortization schedule?
I am currently having a disagreement with my colleagues regarding whether a loan is compounding or not.
I have linked below an image of a amortization schedule for a 52 week term for a $50,000 loan. ...
3
votes
1
answer
578
views
Effective interest rate of two loans
Let's say I have two loans and want to calculate the "effective" interest rate. To make things easy let's assume they have the same principal and the same terms (30 years), just two ...
- 7,924
0
votes
1
answer
150
views
Why do business loan interest rates vary that much?
this might be a very basic and stupid question, but I've just recently started considering bank loans for my business (Covid...) and I have no experience with this world whatsoever.
I've noticed that ...
-1
votes
2
answers
896
views
What formula would I use to calculate the percent of an APR if I knew the payment, principal, and interest?
I'm writing a blog article about potential scenarios in which I might lend someone money and explain how interests work. In my example, I am lending someone $400 and agreed to pay back $100. With no ...
- 282
16
votes
9
answers
9k
views
Is my back-of-the-envelope calculation about taking out a loan to invest into the markets flawed?
With the recent economic struggles due to the Covid-19 pandemic the stock market seems to be even more interesting for personal investments. Taking out a loan might be one of the ways to gather or ...
- 263
0
votes
0
answers
28
views
Choosing between a deep discount bond and a loan with variable interest rate
I was wondering what kind of a method should be used to choose between a deep discount bond and a loan with variable interest. Since one option has a fixed rate, and the other has a variable interest ...
- 125
1
vote
1
answer
2k
views
Formula for calculating the monthly payment for a Personal Contract Purchase
How can I calculate the monthly payment for a PCP (Personal Contract Purchase) when given the variables below?
'Amount to be financed' - finance amount
APR (annual percentage rate - %)
Length of ...
- 13
4
votes
1
answer
217
views
Can banks charge a lower interest rate for loans than for their fixed term savings account and still make profit?
A friend of mine got a loan of 1,000,000 at an interest rate of 10.6% per year for three years and then deposited that 1 million at 3-year fixed-term non-accessible savings account with a return ...
0
votes
2
answers
107
views
Mathematical method to minimize weighted interest rate on a set of student loans for a given payment? [duplicate]
See image attached. I graduated back in May. Even though my loans are in forbearance right now due to COVID and I'm still in my grace period for payments, I wanted to get a head start on figuring out ...
2
votes
5
answers
419
views
Downside of having a zero-interest loan for long time
I am able to get a zero interest loan (APR 0%) of €10k for my small business and I have to decide the debt repayment period (12-60 months).
Mathematically, because interest rate is zero I should ...
- 121
0
votes
0
answers
42
views
what is the actual OBFR loan rate fee?
The OBFR for March 13 2020 was 1.10%. When a company takes a 1 million over night loan, so they pay 1.1% fee of $11,000, or is it annual like credit card and mortgage where the 1.1% gets divided by ...
- 742
1
vote
1
answer
400
views
Calculating Interest Rate From EMI
Suppose there is a loan with equated monthly installments. If I know the loan period, loan amount and equated monthly installment amount, is there a way to calculate the interest rate?
EMI= a * (1 +...
user93997
2
votes
2
answers
159
views
How to get the effective yield?
I have a system that calculates the effective yield. The problem is what formula does the system used to calculate the effective yield. I am trying to convert the system into a mobile application. I ...
1
vote
2
answers
1k
views
Residential Mortgage Tilt Effect
The way I understand the mortgage tilt effect is that the lender "prices in" the expected rate of inflation into the contract borrowing rate, so that the lender is compensated in the earlier years of ...
- 449
0
votes
1
answer
69
views
How to create a derivative fixed rate loan?
Just curious. Someone mentioned he can only find variable rate loans, no fixed-rate option (somewhere in Europe). Which I find strange, there has to be some price that makes such an offering viable. ...
- 133
3
votes
2
answers
304
views
Calculating Annuities With Different Compounding period and Interest Period
Can anyone Help me solve this?
In July 2010, Mike deposits $100 semiannually into an account compounding quarterly at 7% nominal annual interest for three years.
In July 2013, he increases the ...
- 31
1
vote
1
answer
193
views
Taking a loan with a low interest and putting it into a Savings deposit with High interest [duplicate]
Can I make money from taking out a loan from a country with a low interest rate (such as Switzerland, that has an interest rate for loans from 4.9%) and put it into a fixed savings deposit account in ...
1
vote
1
answer
788
views
Formula for previous months interest payment and balance - Reverse Amortization
I am trying to resolve an issue I am having where a system calculated incorrect additional payments on a loan for a couple of months, resulting in the new current balance being incorrect. I want to ...
- 113
5
votes
1
answer
1k
views
Should I take advantage of "interest-free" credit when buying something? [duplicate]
If I buy something like a smartphone or a new PC, when you have these choice:
Pay all the cost at the moment.
Pay it in 6/12/18 months (with loan but without any interest rate and any extra cost).
...
- 153
1
vote
5
answers
2k
views
Reasons for not taking loans with negative interest rate
At the moment, negative interest rates sounds totally obscure. Basically, the lender has to pay the borrower for lending money from him?!?
If this is the case, why shouldn't I just go out to take ...
1
vote
3
answers
425
views
What's the interest rate in this example of irregular payments?
Loaned out $10K, with the following payments (like, these are all the payments there will ever be)
Period 1 2 3 4 5 6
$0 $0 $0 $0 $26K $4K
How would I ...
- 161
3
votes
2
answers
156
views
Loan payment strategy: Private vs federal?
I am a young professional trying to determine the most efficient/cost effective method for paying off my student loans and would greatly appreciate any advice. Currently, I have about $170,000 in ...
0
votes
1
answer
217
views
How to compare the APRs of different currencies?
I want to take a loan and I have two options:
Euros APR: 7.2% terms: 10 years
Yuan APR: 9.2% terms: 5 years
I have taken some financial classes so I have a vague idea about it. I know there is an ...
user79408
1
vote
1
answer
258
views
Optimizing pay down of multiple loans
Most resources seem to indicate that you want to pay down loans in order of decreasing interest rate. However, I did some manual calculations and found I should be paying down the loans based on the ...
- 113
3
votes
4
answers
1k
views
minimum repayment on home loan
How to calculate home loan minimum repayments (before taking out the loan).
For example, with a credit card, they clearly state, that you need to make X amount as minimum repayment (maybe 10%) with Y%...
- 31
0
votes
1
answer
77
views
How to get my head around FRAs
I'm completely befuddled by FRAs - forward rate agreements. Take a look at this definition
....But, how EXACTLY does that fix an interest rate for me at all? There's nothing in that definition that ...
- 1
4
votes
8
answers
1k
views
Why is it so hard to get a quality loan as an individual?
Currently federal funds rate is 2%, this is about what it should cost for a bank to borrow money from the government. I doubt lending money costs them much more than this. Loans taken by corporations ...
- 3,808
1
vote
1
answer
206
views
Rate of return on a loan
If I lend you $100 at, say, 10% annual interest for a 3 year term (36 months), your monthly instalment (usual amortization schedule) should be $3 per month for 36 months, for a total of $116, right?
...
- 11
1
vote
1
answer
102
views
Loan with floating interest [closed]
I have taken a 7 years loan of 450 000 for a car in January 2017 with monthly payment of 7077. The interest rate was 8.25% which means that the total repayment is 593878 after 7 years. As from ...
- 113
0
votes
1
answer
172
views
How do interest calculations differ between loans and savings? [closed]
At the bank or financial institute how are the interest calculation is different from loans and savings? Are they calculated the same way?
2
votes
2
answers
133
views
Buying an interest rate cap of 6,5% for 1500€ seems really cheap?
I have a loan on my house, about 250.000€, to be paid within 30 years. I've an interest rate of EURIBOR + 1,25%.
Now, to get additional insurance, I'm buying an interest rate cap at 6,5% for about ...
- 21
3
votes
2
answers
272
views
How to compare loans of same principal, same interest but with different tenors
I have a scenario where there are 2 loans that can be provided (assuming I am providing the loan). The principal amount is the same, 30,000 in case of both the loans. The interest is also same at 17%. ...
- 1,185
25
votes
7
answers
22k
views
Should I pay for a computer up-front or on finance?
This reads a bit like a home-work question, but this is actually my situation. The job I've taken is a BYOD (bring your own device), workplace and I prefer to use my own equipment.
I've just started ...
user67312
4
votes
3
answers
757
views
What is today's price of €15.000 given 15 years ago?
15 years ago my father gave about €15.000 to a family member in exchange for her share in an inheritance (not materialized to this day). Now this family member has changed her mind and she wants to ...
- 473
4
votes
2
answers
3k
views
How does the amount of down payment of a car affect loans/interest?
My credit rating is poor but I'm looking at a car that is around 27,000. If I have a large down payment (40%) to put towards the purchase of the car would I still get approved for a loan for the ...
- 41
0
votes
1
answer
2k
views
Effective interest rate for mortgage loan
I'm currently deciding between taking loan with down payment and no down payment. To get behind the idea, I read a case study from a finance textbook.
I get the basic math and understand concept of ...
- 103
1
vote
2
answers
398
views
Refinance Car Loan
Refinance Question Car Loan:
Two years ago, you purchased a $20,000 car, putting $4,000 down and borrowing the rest. Your loan was a 36-month fixed rate loan at a stated rate of 6.0% per year. You ...
- 13
1
vote
2
answers
3k
views
How to deal with February in accrued interest calculation (30/360 day count convention)
How would you deal with the month of February in a daily interest calculation on a loan that compounds monthly?
I would think that with 30/360 day count convention, each day in February results in ...
2
votes
1
answer
1k
views
Why does my interest charged (on loan) fluctuate from my own calculations?
I just want to know if I am calculating the interest correctly. Or is the interest rate is fluctuating slightly? Its not really that big of a fluctuation (we're looking at a range of 5-10 cents off). ...
- 33
12
votes
9
answers
7k
views
Are variable rate loans ever a good idea?
For nearly every major credit account I have, or have applied for, the option of fixed vs variable rates are always presented. I've always, almost without even considering, chosen the fixed rate.
Is ...
- 1,371
3
votes
1
answer
4k
views
Two high-interest loans: Pay down one at a time, or split my money?
I have 4 student loans. Two are for roughly $5,000 - one at 4.5% and one at 5.6%. Two loans are for roughly $1,500 and both have an interest rate of 6.8%. Right now I have $1,000 I can put towards my ...
- 31