Many people today apply for a loan. Some decide to buy a house to start a family, others simply want to deal with an unexpected day-to-day life such as replacing a car. Two different amounts for two different types of loans.
Therefore, the repayment of a loan depends on several criteria, the total amount borrowed will inevitably affect the monthly repayments.
Find out why the repayment of a loan is not the same depending on the amount borrowed.
Repayment of a loan over time
The term of the loan
The repayment of a loan will also vary according to the temporal dimension of the latter. If you have a loan repayable over a period of two years, your monthly payments will be spread over this period. They will be different if you opt for a repayment period of one year.
A second time factor is included in the repayment of a loan. This is the periodicity of the repayment. This factor concerns the frequency with which you will repay your loan. You can choose a monthly, bi-monthly, semi-annual or annual period depending on the type of loan and the financial institution or financial institution with which you do business.
Repayment of a loan based on the rate
The choice of the fixed rate
The amount of repayment of a loan depends on the rate chosen. A fixed rate is a security because the percentage is defined in the contract and will never be changed. You can therefore know in advance the exact amount to be reimbursed and accurately plan the refund. This rate is very frequently used for personal loans. It is also possible to make the choice of progressive fixed interest. This type of rate will not increase interest, it is the monthly payments that will be gradually increasing.
The choice of variable rate
The variable rate changes every year. It makes it possible to benefit from the fluctuations of the market which can be interesting in case of fall. This can also avoid being penalized in case of early repayment. This is a rate sometimes used for home loans.
The only negative is that it prevents the borrower from having the full cost of his credit.
Repayment of a loan varies according to several criteria
The refundable amount will therefore not be identical depending on the total value of the loan. It will vary according to several criteria: the value, the term, the periodicity of monthly payments and of course the type of rate chosen. It is therefore important to analyze the need for money before making a loan. The goal is to know in advance if it will be possible to repay each monthly payment without any delay or difficulty.
If you wish to apply for a loan, do not hesitate to contact a specialized agency for more information.