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How interest is applied to loans
nmaniv
Posts: 1 Newbie
Hey everyone,
I need help understanding how interest is applied to my loan over time.
Here are some example stats
Monthly Mandatory repayments (taken from my pay): £130
Interest rate: 6.3%
loan: £66,000
Would my loan grow every month based on this equation ?
new balance = balance + (balance * 0.063)/12 - 130
> does this happen every month for 30 years?
> is the interest applied before or after the mandatory repayment is deducted?
Thanks!
---
P.S. I'm trying to make a computer program that simulates loan repayments and want to make sure I am using the correct formulas
I need help understanding how interest is applied to my loan over time.
Here are some example stats
Monthly Mandatory repayments (taken from my pay): £130
Interest rate: 6.3%
loan: £66,000
Would my loan grow every month based on this equation ?
new balance = balance + (balance * 0.063)/12 - 130
> does this happen every month for 30 years?
> is the interest applied before or after the mandatory repayment is deducted?
Thanks!
---
P.S. I'm trying to make a computer program that simulates loan repayments and want to make sure I am using the correct formulas
0
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