Types of Interest Rate Bank Loans

For those of you who will be or is being applied for a loan at the bank, perhaps for working capital or for any other reason, it would not hurt you to read my article this moment. Here I will share with you on how to distinguish the type of bank loan and what kind of calculations. Prior to a more serious stage, I will explain first about understanding Interest Rates.
I'm sure most of you have heard about the interest rate, what is the interest rate? The interest rate is the percentage of debt principal is paid as a reward (interest) in a given period.
Once you know what the interest rate, now I will continue on the various interest rates. In the world there are several types of loan interest rate that you should know before you apply for loans. This is necessary so that you do not regret it later. In addition, by knowing the differences of each type, you can easily determine where the interest rate that suits your needs and abilities as the different loan interest rates were also different. Here are the types of interest rates are generally accompanied by menghitunya also:

1. Flower Flat

Type of interest rate is the most convenient way to calculate monthly installment for the same. His name is also flat (flat), so the calculation is proportional to the term of the loan because the interest rate is calculated from the percentage of times the initial loan principal. Interest rates on short-term loans often designated as vehicle loans, etc..
Example: You owe U $ D 10,000 with a flat rate of 12% per year, then each month the interest is U $ D 100
Fixed formula:
Interest per month = Total loans x Interest rate per year / 12
Total Loan Amount x Interest = (Interest rate per year / 12) x length borrowing in months
've Understood it for the explanation rate this one, if not understand please read and learn more. Well I will continue.

2. Effective Interest

The effective interest rate is often also called sliding, ie the interest calculation is done every end of the installment period or the interest is calculated on the amount outstanding at the end of each month. So basically, every month the amount of interest you pay will vary based on the amount of existing debt. With this calculation, I can say you are in profitable because each month the amount of interest you pay is getting smaller. The second installment will be smaller than the first installment, the third installment will be smaller than the second installment, and so on, until they run out.
For example, you have a debt of U $ D 10,000, - with an effective interest of 12% per annum, with principal repayments U $ D 1000, - per month. Then:
1st month interest rate 1% x U $ D 10,000, - = U $ D 100, -
2nd month interest rate 1% x U $ D 9,000, - = U $ D 90, -
3rd month interest rate 1% x U $ D 8,000, - = U $ D 80, -
and so on ..
Effective Interest formula:
Interest per month = Balance at end of period x annual interest rate / 12

3. Annuity interest

Interest Annuity can be regarded as a modification of the effective interest loans. This is done by the bank to facilitate the customers when it will pay monthly installments. Although the fixed monthly installments, but the composition of interest and principal repayment will remain unchanged in each period. It means the amount of interest monthly will continue to shrink while the monthly principal enlarged. But when nearing the end credits, the conditions will turn around. Namely the principal portion will be very large, while the interest portion will be smaller.

4. Floating Rate

Floating Rate calculation is different from the previous interest rate, the interest rate was affected by market interest rates. It means that if interest rates rise, the market will go up but if you go down will also go down. So the interest rate will fluctuate during the ongoing credit premises used to follow certain foreign banks. The interest rate is usually enacted to long-term loans such as housing loans, working capital, venture capital and investment.

Be enough until here my explanation of the interest rate, I hope what I share this for you. And hopefully it can be a material consideration and knowledge for those who want to apply for a loan. Success greetings from me to you all.