The National Survey of Financial Inclusion (ENIF), discovered that Mexicans prefer to borrow from friends or family members rather than go to a bank, why? For the high interest rates they must pay for a loan. Interest rates are set by the Bank in Mexico to curb inflation, curb consumption or reduce a possible recession; in other words, according to macro and micro economic variables, whose establishment of rates might seem arbitrary at first sight, and without doubt the reflection is controversial, but that is a subject for another time.
Review how to calculate the interest on a loan
The interests of a credit vary according to the interest rate precisely, and this varies according to the time in which we take to repay the loan, and if we talk about banking institutions we must not forget that the variables are also taken into account Macro and micro economic analyzed by the Central Bank. Now suppose that today we apply for a loan or loan with an interest rate of 4% per month; This will mean in practical terms that if we ask for $ 1,000.00 pesos to 12 months, we will have to pay $ 4,800.00 pesos to interest after one year, which is 48% per year. It is very much, isn’t it? That is why it is so important to know how to calculate the interests of a credit.
Let’s review how much we should pay in different installments
Let’s look at another example, suppose we want a loan of $ 64,000.00 pesos and the rate is 10.9% per year (eye: “annual”, not “monthly” as the previous example), which means that we will pay less than 1 % interest. Wonderful! Right? Following this example, let’s review how much we should pay in different installments:
Loan: $ 64,000.00 pesos.
Interest rate: 10.9% per year.
Monthly payment at 12 months: $ 5,704.30 pesos.
24-month monthly payment: $ 3,030.67 pesos.
Monthly payment to 36 months: $ 2,144.10 pesos.
At the above costs, we must consider common variables that manage all financial institutions and also private capital companies, as well as funding companies: opening commission and the CAT (Total Annual Cost) of your credit, which includes commissions and credit interest rates.
Calculate the interests of a credit
Then: to calculate the interests of a credit, we must consider the time in which we will pay, the interest rate, the commissions generated and – very important – the annual percentage of the interest rate.
You can also choose to look for a serious collective fundraiser, which clarifies before what are the interest rates they have and, better yet, that includes a credit calculator or simulator so that we can evaluate the suitability of applying for a loan or loan.