0
Why is the interest rate for used cars loans higher than the interest rate on home loans?
Wiki User
∙ 8y agoWant this question answered?
Be notified when an answer is posted
Add your answer:
Earn +20 pts
. The bank earns 10 percent on commercial loans and 12 percent on home loans. What amount of money should be allotted for each type of loan to maximize the interest income?
All of the money into home loans of course.
What is the contact number for SA Homeloans?
SA Home Loans offers home financing for home buyers in South Africa. The sales contact center of the company can be reached by phone at 0860-246-810.
The clalisles borrowed 94000 to buy their first home the interest rate on their loan was 7.5 percent for 20 years how much interest will they have to paid after 20 years?
141,000
My mother sold her home in Texas and my father who is in a nursing home wants the sell of the property to be void is this possible?
Who owned the property. She did or he did? She can't sell if he had an interest with out his consent.
Why is more interest paid at the beginning of a loan versus the end of a loan?
More interest is charged at the beginning of a loan to appropriately cover the "average balance" of the principal. At the beginning of the loan, the entire principal is due, so one would pay more interest on that principal. Using a simple credit card example, say one buys $1,200 of home furnishings at the beginning of the credit card cycle and decides to pay that balance off over time. The individual also commits to paying $150 per month until the balance is paid. Finally, the credit card charges 18% per year in interest and payments are made in the middle of the credit card cycle. So, putting it all together as follows: Month BegBalance Purchases Interest Payment EndBalance AvgBalance zero $0 $1,200 $0 $0 $1,200 $1,200 one $1,200 $0 $18 $150 $1,068 $1,134 two $1,068 $0 $17 $150 $935 $1,002 three $935 $0 $15 $150 $800 $868 four $800 $0 $13 $150 $663 $732 five $663 $0 $11 $150 $524 $594 six $524 $0 $9 $150 $383 $454 seven $383 $0 $7 $150 $240 $312 eight $240 $0 $5 $150 $95 $168 nine $95 $0 $2 $97 $0 $48 As one can see, the higher the average balance, the more one pays in interest. Home loans, auto loans and personal loans are all computed in a similar way (step-by-step), however, the total of the interest payments are added to the beginning principal then divided by the number of periods over which the loan is to be paid to get to a single payment. IN the above example, pretending that the loan was to be paid over nine (9) months, the monthly payment for an associated personal loan of $1,200 would have been $144 (as one can see, the final payment was less than the $150 usually paid). For perspective, the amount of interest paid in the first and last months would have been $18 and $2, respectively. While we ignored the complexity of month-adjusted interest (months in which there are more days generate more days of interest), grace period (time allowed to pay a balance without incurring finance charges), and residual interest (the interest on the average balance for the month in which the bill was paid in full - would have been 72 cents in month ten), the idea is the same - bigger average balance - higher amount of interest paid. The formula for computing periodic payments is presented as follows: PMT = PRINCIPAL * ((1 / periodicrate) - (1 / ((1+periodicrate)^periods))) [excel: '=pmt(periodicrate, periods, PRINCIPAL)'] where: PMT is the monthly (periodic) payment PRINCIPAL is the amount borrowed periodicrate is the rate per period (e.g., 18% per year = 18%/12 = 1.5% per month) periods is the number of periods in the loan (e.g., 9 months = 9 periods) [finding interest payment: excel: '=ipmt(periodicrate, whichperiod, periods, PRINCIPAL)'] Where whichperiod is the period for which you want to know the interest portion of the payment
How do secured home improvement loans differ from other loans?
Home secured loans have a higher maximum term than other loans. Lower interest rates, flexibility, lower payments and more lender options are benefits of a secured home improvement loan.
What are the interest rates offered by Abbey Home Loans?
Abbey Home Loans offer low interest rates on home loans for Canadians. To learn more about the current interest rates, one must request a quote from their local financial institution.
Where can one find information about interest free home loans?
Interest free home loans are available from banks and building societies. You may also find information on interest free loans from your local council or government.
Which types of institutions have the lowest interest rates on home loans?
Myrate and Homestar are two institutions which have the lowest interest rates on home loans available. They are two institutions used by many when it comes to home loans.
What type of loans have the lowest interest rates?
Typically, home loans have the lowest interest rate. Credit cards and Pay Day loans usually have the highest interest rates.
What are good interest rates for bank loans in 2013?
What qualifies as a good interest rate depends on the loan. There are car loans, mortgage loans, home equity loans and personal loans. The interest rate for each loan differ.
Where can one obtain no down payments home loans in the UK?
Most banks offer no money down home loans. It is not adviced though because they have higher interest costs. If you still want this loan, you can get one at the HSBC bank
What is special about Chase home loans?
A chase loan home is special because it is easier to obtain than other home loans. Chase home loans have a lower interest rate than most other home loans.
Are sub primes loans available to people without equity in their home.?
Sub Prime loans are available to most anyone. However they are the loan of choice for those whose credit might not be adequate to obtain an more traditional home loan. Most times Sub Prime loans are issued at a higher interest rate or with a variable interest rate that fluxuates with the market.
What types of home loans are there?
There are a couple of types of home loans available. Some of those types include FHA loans, Fixed-Rate Mortgage loans, VA loans, and Interest-Only Mortgage loans.
What are interest rates on home equity loans?
The interest rates on home equity loans are very low at the moment because of the economic situation. Depending upon a person's location and how much they want to borrow loans can be obtained with interest rates of between 3% and 8%.
Where can one find information about average interest rates on home equity loans?
Finding average interest rates on home equity loans is not difficult. This information can be found by speaking to a financial expert in a bank, or at any financial institution that provides home loans.
