Getting out of debt as soon as possible is a wonder, isn’t it? In addition to being less a must, you can still save money. Therefore, when you get an extra resource, sell it to a good one, or receive your thirteenth salary, understand how the loan settlement calculation works.
The advantages of repaying the loan
Paying off the advance loan is almost always a great alternative. With this, it is possible to save on the interest that would be charged on the later installments and even allows to better organize the financial life. For example, it is not necessary to keep the installment separate in the budget and can use it for another purpose or to invest.
In any loan there are interest. After all, this is how banks make money, which makes this practice beneficial to them. Therefore, when repaying the loan, interest exposure is limited. Depending on the debt, such as credit card and overdraft, interest rates can be very high, these two modes have the highest interest rates in the entire country.
The right to anticipate
Therefore, there is a right to advance payments and repay the loan whenever you wish. And in contracts signed after 2007, no extra fees can be charged due to early discharge.
It is not necessary to pay off the entire debt redemption at once, and it can partially offset the amount. So even if the resource is not sufficient to write off all the debt, it is worth doing as much as possible.
The formula of the calculation
Now we come to the most important point: how to do the calculation for loan repayment. To make this calculation you need to know what is the outstanding balance of the contract and the contracted interest rate. With this information you calculate the present value of the loan by the date you will make the payment.
How to repay the loan?
Now that it is clear how the loan settlement calculation works, just proceed with the procedure. To do this, you need to contact the institution and advise that you intend to do so that they will print a slip with the remaining amount payable.
So the next time an employee can pay off a loan you can guide him much better. And if you want to bring even more comfort and efficiency to your employees, register your company on our platform!