Explanation on Interest Calculation for Borrowers and Sureties
- Interest payable per month is calculated using the effective interest rate method (effective interest rate x outstanding balance).
- Interest payable is NOT calculated using the flat rate method (flat interest rate x original loan amount).
- If a borrower does not repay promptly, the interest payable and outstanding loan balance will increase.
- The more missed repayments, the higher the amount that will need to be repaid and the longer it will take to repay.
LOAN TYPE | L1 | L2 | L3 | L4 | L5 | L7 | L8 | L9 | L11 | L12 | L13 |
|---|---|---|---|---|---|---|---|---|---|---|---|
FLAT RATE | 6.50% | 6.50% | 6.00% | 4.00% | 4.00% | 6.00% | 6.00% | 6.50% | 6.50% | 6.50% | 2.20% |
EFFECTIVE INTEREST RATE | |||||||||||
TENOR IN MONTHS | |||||||||||
12 | 11.82% | 11.82% | 10.93% | 7.31% | 7.31% | 10.93% | 10.93% | 11.82% | 11.82% | 11.82% | 4.05% |
24 | 12.04% | 7.51% | 7.51% | 11.15% | 11.15% | 12.04% | 12.04% | 12.04% | 4.17% | ||
36 | 11.97% | 7.54% | 7.54% | 11.10% | 11.10% | 11.97% | 11.97% | 11.97% | 4.21% | ||
48 | 11.86% | 7.49% | 7.49% | 11.01% | 11.01% | 11.86% | 11.86% | 11.86% | 4.20% | ||
60 | 11.69% | 7.42% | 7.42% | 10.87% | 10.87% | 11.69% | 11.69% | 11.69% | 4.19% | ||
72 | 11.58% | ||||||||||
84 | 11.43% | ||||||||||
