Proper understanding of personal loan guarantee insurance (II) – Financial & Insurance News

Proper understanding of personal loan guarantee insurance (II)

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After understanding the personal loan guarantee insurance, what is included in the monthly repayment amount if the funds are successfully obtained?
When purchasing personal loan guarantee insurance, consumers should carefully read the insurance tips, insurance terms and conditions, informative matters and other related documents to fully understand the functions and features of the loan guarantee insurance products and to clarify the loan cost and premium amount. After confirming the signature, they assume the corresponding legal responsibility. Consumers are advised to purchase personal loan guarantee insurance through formal institutions or channels that have been approved by the regulatory authorities.
We get the money, part of the principal of the bank, the bank issued the loan, then you need to charge interest, the general bank repayment method is equal principal and interest repayment method (equal principal and interest do not understand can refer to my previous article), the other is the insurance company premium, our monthly repayment contains the following.
Monthly repayment = loan principal + interest + premium
Here is the focus on the premium, since the loan guarantee insurance, then the insurance is the bank lending the loan, usually the insurance amount is equal to the amount of the bank lending (that is, the amount of the consumer’s loan), in the signed personal loan guarantee insurance policy will have clear instructions, such as the amount of insurance, the premium rate is how much, who is the insurer, the terms of insurance liability, etc..
How is the premium calculated?
The premium is calculated by multiplying the amount of coverage by the premium rate (for example, if the loan is $120,000, the coverage is $120,000, and the premium rate is 0.8%, then the premium amount = 120,000 * 0.8% = 960).
Note that the premiums calculated here are per premium, not the total premium.
For example, if the loan amount is 120,000, the bank interest rate is 6.53%, the number of loan periods is 36, and the premium rate is 1%
The monthly bank principal plus interest is $3679.52, the monthly premium amount is $1200
The monthly repayment amount is 3679.52+1200=4879.52