How Can I Get a Loan Reimbursement?

The loan repayment period is also called "solvency analysis". It refers to the required period of time when the amount of income and taxes that can be used as the solvency according to national regulations and the specific financial conditions of the project are offset with the loan amount each year. It is a comprehensive indicator that reflects the repayment ability of construction projects and the economic results. According to the State Council's "Provisional Regulations on Capital Construction Loans", from the date of signing a contract to full repayment of principal and interest, the loan repayment period for heavy industrial enterprises can not exceed 15 years, and other enterprises can not exceed 10 years. The maximum length of the project is five years. ^[1]

Loan repayment period

Right!

The loan repayment period is also called "solvency analysis". It refers to the required period of time when the amount of income and taxes that can be used as the solvency according to national regulations and the specific financial conditions of the project are offset with the loan amount each year. It is a comprehensive indicator that reflects the repayment ability of construction projects and the economic results. According to the State Council's "Provisional Regulations on Capital Construction Loans", from the date of signing a contract to full repayment of principal and interest, the loan repayment period for heavy industrial enterprises can not exceed 15 years, and other enterprises can not exceed 10 years. The maximum length of the project is five years. ^[1]

The domestic loan repayment period refers to the time taken to repay the domestic loan principal and interest during the construction period with the funds available for repayment after the project is put into production under the national financial regulations and specific financial conditions of the project [1].

The calculation of the loan repayment period is based on the calculation of the interest payable in each year and the accumulation of the loan principal under the conditions that the loan is used in each year and the ability to repay each year is known. Among them, the interest calculation formula is as follows

Loan interest during construction period = (accumulated loan principal at the beginning of the year + loan used this year / 2) × annual interest rate

Production period loan interest = (accumulation of loan principal at the beginning of the year-loan repayment this year / 2) × annual interest rate

Annual interest repayment of the loan = accumulated loan principal at the beginning of the year / 2 × annual interest rate

Of which: Annual interest rate = monthly interest rate × 12 Loan repayment period calculation formula: Loan repayment period = Annual serial number of repayment loan -1 + Repayment of current loan / Repayment ability of current year

Of which: loan repayment in the current year = accumulated loan principal at the beginning of the year + interest payable in the current year

Example problem calculation process: (assuming an annual interest rate of 6%, also known as 6 points)

1 year:

Interest payable this year = (0 + 1800/2) × 6% = 54 years

Accumulation of the final loan principal = 0 + 1800 + 54 = 1854

2 years:

Interest payable this year = (1854 + 1200/2) × 6% = 147.24

Accumulated loan principal at the end of the year = 1854 + 1200 + 147.24 = 3201.24

3 years:

Interest payable this year = (3201.24-680 / 2) × 6% = 171.67

Accumulated loan principal at the end of the year = 3201.24-680 = 2521.24

4 years: (The following refers to the third year)

Interest payable this year = (2521.24-790 / 2) × 6% = 125.57

Accumulated loan principal at the end of the year = 2521.24-790 = 1731.24

5 years:

Interest payable this year = (1731.24-790 / 2) × 6% = 80.17

Accumulated loan principal at the end of the year = 1731.24-790 = 941.24

6 years:

Interest payable this year = (941.24-790 / 2) × 6% = 32.77

Accumulated loan principal at the end of the year = 941.24-790 = 151.24

7 years: The accumulated loan principal at the beginning of the year is RMB 1.5124 million, which is less than the current repayment capacity of RMB 7.9 million, which means that this year is the year of repayment of the loan.

Interest payable this year = 151.24 / 2 × 6% = 4.54

Loan repayment period = 7-1 + 151.24 / 790 = 6.2 (year)