Types of loan repayment schedules for legal entities

Consider the main types of loan payment schedules that are offered to legal entities when lending to a bank. Pros and cons of each chart. The choice of the most optimal.

Instruction manual

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1) Annuity

With him, the monthly payment amount throughout the loan does not change. This is achieved through a clever formula with raising the denominator of the formula to the degree of the loan term. A manual similar formula cannot be calculated. Therefore, it is most beneficial for banks. With this type of loan repayment, you pay all the main interest in the first months of using the loan. Those. The main debt practically does not decrease in the first years of the loan. And subsequently, if you did not repay the loan ahead of schedule in advance, it makes no sense to repay it ahead of schedule, because you already paid all the interest.

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2) Equal shares or differentiated schedule

Its main difference is that each month you pay the same amount of principal. At the same time, monthly interest amounts to a different amount. And paid from the balance of the main debt. It’s easy to figure out that in this way the payment will go downward. Because you pay the maximum interest in the first month, and then, because monthly, the main debt on your loan decreases, and the amount of accrued interest decreases.

When comparing the annuity and equal shares, interest for using the loan, it is clear that you will pay less when paying off the loan in equal shares.

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3) Individual schedule

This is a subset of the graph in equal shares. Its difference is that the entrepreneur can choose for himself a delay in repayment of the main debt up to 12 months. and pay only interest. Accrual in the future occurs by analogy with the schedule in equal shares.

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Thus, the most beneficial for the entrepreneur in terms of interest payable will be equal charts and an individual schedule.