Loans with a so-called closing rate are special financing instruments, which are usually used to keep the payment rates low during the term of the loan. The reasons for this can be manifold. Often, these loans are financed at closing rates such as a car.
Behind this is the idea that the car should be sold again after a certain period of use, which is usually between 2 and 4 years. With the selling price of the motor vehicle then – at least largely – the final installment to be paid.
An invoice with many variables
However, calculating a loan with a final installment is not that easy. Several variables have to be matched. This starts with the amount of installments to be paid during the term. The lower the current installments, the higher the closing rate will be. What is comfortable during the term of the loan can ultimately lead to a nasty awakening.
This can happen if, for example, the selling price for the car is insufficient to pay the final installment.
The borrower should therefore really consider whether he wants to take this risk. If in doubt, it is advisable to set the current installments rather higher than absolutely necessary. This is also true because at low rates, the repayment, ie the repayment of the loan amount, is lower, with the result that the interest charge increases over the entire term.
Way of calculation
It should be left to a specialist with an appropriate computer program to calculate a loan with final installment. He can best calculate the personal income ratios today and at the end of the term for a credit with a final installment and reconcile them with the monthly debits and the final installment.
He also knows the different terms of the different banks for such loans, all of which must also be entered correctly into appropriate computer programs to calculate a loan with a final installment.
Target of the calculation
A good calculation of a loan with a final installment is in any case a proven way of adjusting the financial charges to the actual performance of a borrower at different times.