Proper understanding of personal loan guarantee insurance (III)

How do I calculate the right loan cost for credit guarantee insurance?

Once we understand what personal guarantee insurance is and how the cost of personal guarantee insurance is calculated, how exactly do we calculate the monthly cost of our loan?

The general term of personal loan guarantee insurance is 12 months, 24 months, 36 months

Depending on the individual’s use of funds, the consumer may choose to settle at an agreed upon point in time, with specific confirmation from the insurer and the bank issuing the loan.

In addition to confirming the time requirements for early closing, the cost of early closing is also one of the things that needs to be considered, as it needs to be calculated into the cost of our loan, i.e. the total amount of interest that the consumer will end up spending should be added to the cost of early closing.

We calculate the overall cost in two ways.

1, the total cost, that is, the sum of the bank interest on the loan, personal loan guarantee insurance premiums, early settlement fees three costs

After calculating the total cost, you can clearly see the total cost during the loan period, so you can also confirm the availability of the loan according to your financial ability and capital turnover and capital efficiency rate, that is, we usually say that the cost performance is not high.

2, by way of annualized rate of return (IRR) to calculate the specific annualized interest rate of the loan after closing, this situation, generally speaking, in operating companies will be more applications, because the last given is a percentage data, personal reference in addition to determine whether the loan is in line with national requirements, the use is generally not very large. Specific groups of people need to know the annualized interest rate, can be calculated in detail through the IRR calculation formula within excel.