How much interest do I have to pay each month on a 200 million bank loan?

Borrowing money from a bank is one of the solutions that many people choose when facing financial difficulties. Currently, many banks offer loan products of 200 million. This is not a small amount of money, so interest rates are a matter of particular concern to customers.

Forms of bank loans 200 million

Normally, when borrowing money from a bank, customers can choose to borrow on credit or mortgage (with collateral). In the case of borrowing 200 million from a bank, the bank allows customers to borrow on credit.

The advantage of unsecured loans is that the procedures are quick but the interest rates are quite high. However, to have the bank approve the unsecured loan application, the customer must prove their personal capacity and have a good credit history.

On the contrary, for mortgage loans, customers are required to have collateral such as real estate, pink book, red book, savings book... Mortgage loans have many outstanding advantages such as high limit (70% of the value of the collateral, lower interest rate than unsecured loans, loan term up to 35 years...)

How much interest do I have to pay each month on a 200 million bank loan?

With a loan of 200 million, banks will offer two ways to calculate interest: based on the initial fixed rate and based on the decreasing balance.

How to calculate interest on initial balance

Interest = Initial loan amount X Interest rate. Principal = Initial loan amount ÷ Number of months of loan. Total amount = Monthly interest payable + Total principal payable to the bank.

For example, a customer borrows 200 million from Vietcombank in the form of unsecured loans with an interest rate of 12%/year for 60 months.

Applying the above formula, the principal and interest that the customer must pay is as follows: Principal: 200,000,000 ÷ 60 months = 3,333,333 VND. Interest: 200,000,000 X 12%/12 = 2,000,0000 VND

The total principal and interest that the customer must pay monthly is 5,333,3333 VND.

How to calculate interest on decreasing balance

Total monthly payment = monthly interest + monthly principal.

1 month interest = (original loan amount - principal paid) X interest rate.

Principal for 1 month = initial loan amount/number of months of loan. For example, a customer borrows 200 million from Agribank for 5 years with an interest rate of 9%/year. Applying the above formula, the principal and interest the customer must pay are as follows:

First month:

Principal: 200,000,000 ÷ 60 months = 3,333,333 VNDInterest: 200,000,000 X 9%/12 = 1,500,000 VND Total principal + interest = 1,500,000 + 3,333,333 = 4,833,333 VND

Second month:

Principal: 200,000,000 ÷ 60 months = 3,333,333 VNDInterest: (200,000,000 - 3,333,333) X 9%/12 = 1,4750,000 VND Total principal + interest = 1,475,000 + 3,333,333 = 4,808,333 VND

Thus, the interest amount in the following months will gradually decrease because the principal has been paid gradually each month.

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