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Calculating Loans

Calculating loan repayments

Hello All,

I'm afraid this is a rather basic question but I'm trying to wrap my head around the logistics of my loan. Initially, this was because I wanted to account for the interest but now I just want to know how the loan agreement leads to me making the particular monthly repayments.

 

So under the loan agreement, I have a loan of £20,000 which I can drawdown in one bulk if they choose. I draw £19,777 on 19.07.18. Interest is 10% per year, compounded on a daily basis. Per the loan agreement, I pay two interest payments on 01.09.18 and 02.09.18 both for £171. After this, the loan and interest on the loan will be repaid in 58 consecutive monthly repayments. It appears that these monthly repayments are for £437.71, which I can't understand.

 

The loan agreement also states that upon drawdown, a 1% fee shall be paid, in addition to a £23 security fee and a ree for the legal costs of the loan agreement - undisclosed.

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08th Dec 2018 23:33

If run your figures through my loans repayment spreadsheet I get a monthly payment of £436.21, assuming the 1% and the £23 get added to the loan.

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09th Dec 2018 13:19

There's a few spreadsheets available on Excel that'll work this out for you.

They vary slightly depending on the assumptions the compiler made when he set up the spreadsheet.

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09th Dec 2018 13:34

Bit depressing that an accountant can't work it out.

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to Accountant A
09th Dec 2018 13:44

Hard work if the interest is compounded daily, though.

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to lionofludesch
09th Dec 2018 14:08

lionofludesch wrote:

Hard work if the interest is compounded daily, though.

I'd be using Excel.

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09th Dec 2018 15:01

At the OP.

As others have suggested use Excel or similar. Most spreadsheets, like Excel, contain a single function in which you add the loan criteria, e.g. principal, term, payment frequency. Just enter the factors and it spews out the answer. You could do it longhand using a spreadsheet and iterate to achieve the answer. Microsoft help on this function is actually good and plentiful.

BTW. I think you mean logic not logistics. Two very different things.

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