What is the installment?
The installment is a cash payment made of the loan that has been paid. It is a periodic payment that is usually a predetermined amount that includes a percentage of interest and a percentage of principal. If the loan has the loan itself, it has the potential for payment of installments that has the interest rate itself, which is common for some mortgages or student loans.
Payment payment is a common type of repayment plan for many loans. Automatic loans, housing mortgages, home capital loans or student loans are usually installments. This means that the debtor often receives a statement with the number of repayment payments left on the loan. For example, a five -year automobile loan will consist of 60 installments in the same amount or one installment per month.
by paying a little extra for a predetermined amount of payment, it is often possible to repay the loan in an even shorter period, but it is important to read the printing printing and determine if the penalty has been punished. This is not common, but it happens. In most orThe Adů will be a fixed interest rate loan to have a repayment that remains the same throughout the life of the loan unless another type of payment plan has been organized with the creditor. Loans with variable interest rates naturally cause the monthly amount of payments to vary.
The installment differs from the rotary credit line because the revolving credit line can be repaid and used again and again and the payment amount will be based on the monthly balance. In the installment loan, the installment is based on the initial amount of the loan plus interest, which will increase throughout the life of the loan. In some repayment loans, the same amounts and interest are paid for each monthly payment, but other loans begin to be aimed at interest and less to the main one month.
Over time, this ratio turns until all interest is repaid and the entire payment goes to the amount of principal. This will be stated in the loan documentationy. Loan loans are beneficial for many reasons, but above all because they usually do not cause any surprises; It is easy for debtors to plan installments in the monthly budget.