Interest is a kind of remuneration for banks or non-bank companies for granting a loan. The principal interest on the loan should be included in the contract. And how do you calculate them and what does interest based on? What is the maximum interest on the loan?
Banks as well as non-bank companies grant loans to their clients to achieve a certain profit. Therefore, regardless of whether we decide on a standard payday loan, a loan without certificates or a loan, we will most likely have to pay extra for them. An exception is special offers, e.g. free loans for new customers, where the APRC is 0% .
The cost of such a loan consists of several elements: commission, additional costs, as well as interest, i.e. the interest we will pay on the borrowed amount. The interest rate is determined on an annual basis, while the installments are repaid every month. And what does capital interest depend on? Their amount is mainly influenced by the interest rate, the amount of capital and the time for which we borrow money.
Special interest formulas are used to calculate interest on a loan, but the simplest and fastest way to find out how much interest you pay on your loan is to use the online loan interest calculator . Using this tool, you can estimate the amount of annual and monthly interest-related expenses. However, it is worth remembering that the loan interest calculator will only show us the cost of interest, and not all fees associated with taking out the loan.
Capital interest should be included in the loan agreement. Therefore, before signing it, we should check that they do not exceed the maximum amount of interest. And what is the maximum amount of capital interest? Each year, the Minister of Justice announces the amount of statutory interest. He usually calculates them by adding up the current reference rate set by the National Bank and 3.5 percentage points. The maximum interest cannot be higher than twice the statutory interest, which is currently 10%.
Knowing the maximum capital interest is very important because many dishonest non-bank companies require too high interest on the loan. Knowing the amount of maximum interest, we can protect ourselves from excessive expenditure.
The situation is similar in the case of maximum interest for delay, which is a kind of penalty for the borrower who failed to meet the repayment date. Currently, the statutory interest rate for delay is 7% per annum. They are calculated by adding together the reference rate and 5.5 percentage points. And what are the maximum interest for delay? The maximum interest is twice the statutory interest for delay, i.e. 14% per annum.