Anyone who accepts a loan has the possibility to repay it and repay it in various ways. One of these possibilities is the division into several payments, thus a part payment always is called rate. Such rates are usually to be paid monthly and are therefore also called monthly rate Monthly Rate bezeichnet.
In other cases, however, installments may also be paid annually or semi-annually.
Calculation of monthly rate
The amount of the monthly rate depends on the loan height and the desired number of installments or a desired maturity of the loan. In order to determine the monthly installment rate, the loan amount is then distributed to the respective installment rate. This means that the more rates are agreed, the lower the monthly rate. At this monthly rate and the repayment in general, then additional interest will be charged, which are also dependent on the maturity. The longer a money sum is made available, the higher the interest rates will be, ie the interest rates increase with the maturity and the total sum of all repayments increases.
Design of monthly rate
However, as lenders and borrowers can make credit and loan agreements very freely, the monthly rate can vary widely. For example, some lenders calculate the repayment in the monthly installment, and the interest can be paid out in a single sum at the end of the term. Other lenders make it exactly the other way round, and only the interest rates can be paid monthly and the entire loan amount at the end of the term in a sum.
Over-year rates, half-year rates, special repayments or a mix of all possibilities is possible here.
Loans with fixed or falling monthly rates
It is also possible that the monthly rate becomes higher at the beginning of the loan and becomes more favorable at the end of the term, or even loans where the monthly charge has the same amount over the entire credit period. This is dependent on the respective contract form, with the lender being either a annuity or payment of a loan. This makes it possible to tailor the contract to the customer and their needs. Nevertheless, the lending business is now relatively standardized, so that fixed products of credit forms are offered. The repayment must be made in a fixed and relatively inflexible manner, only the amount of the monthly rate, the purchase time and the amount to be lent are variable in these products.
Special repayments or agreements which deviate from this form are usually granted only for commercial purposes or for mortgage lending, as this is a higher one collateral value which justifies such a correspondingly higher effort.
Amount of monthly rate
In principle, however, for every customer, the monthly rate is only set so high that it leaves air still up. This means that it should be planned as pessimistically as possible so that unforeseeable events such as illnesses, salary reductions or temporary job losses can not lead to the monthly rate being dispensed with. Loan comparisons and credit calculators give you an indication of the monthly rate you should expect and the maximum monthly charge. Particularly in mortgage financing, you are most likely to be guided by the monthly rent and reserves which you can make due to this burden.