When subscribing to a consumer credit, the borrower agrees on a monthly amount to be paid to the lender: the monthly installment of credit. Learn more at bureauboth.com
Calculation of a monthly loan
A monthly installment of credit includes a share of capital, a part of interest and a part of optional insurance. The calculation method for determining the monthly payment credit is simple and requires 3 data. It depends on the amount borrowed, the duration chosen and the APR (Annual Effective Rate). These are the elements that allow consumers to compare different credit organizations and make the best choice, depending on their situation.
Comparison according to the chosen loan
Another consideration to consider when borrowing money to finance a project or purchase is to choose a suitable solution and credit agreement. In summary, the choice will be mainly on three loan formulas:
- An assigned loan, the sum of which is intended to finance a property. Depending on the property financed, the interest rate varies, which affects the monthly payment of credit.
- Unallocated funding. In this case, it is a personal loan, which allows to freely dispose of a sum of money. This type of loan makes it possible to choose its duration and thus to adjust to its budget its monthly credit.
- A revolving credit, whether or not associated with an optional credit card. The monthly installment of credit makes it possible to reconstitute the sum used so that it is available again for new uses.
Choose according to your situation
The choice of monthly loan credit is important. It must be done according to its ability to repay, as advocated by different consumer laws. In general, the ratio of indebtedness, applied by the financial institutions, is acceptable when the monthly payments correspond to a maximum of 33% of the annual net income of the borrower. Pre-Finance, from its website, offers, for any loan formula, a simulation tool that returns various proposals to allow the consumer to choose the monthly payment that suits him.