What is Personal Instalment Loan’s interest calculation method?

Our Personal Instalment Loan uses straight-line methods to calculate the proportion of interest and principal in each monthly repayment. Even though the monthly repayment amount is the same throughout the loan tenor, more interests will be included in earlier repayments and less on principal.Here is an example:A customer borrows HKD 120,000 for 12 months with a monthly flat rate of 0.14%, and the handling fee is waived. Annual Interest is 3.087%, APR is 3.13%。Monthly interest: HKD 120,000 x 0.14% = HKD 168
Total interest for the full term = HKD 168 x 12 months = HKD 2,016
Monthly repayment amount: (HKD 120,000 + HKD 2016)/ 12 = HKD 10,168
1st Term Interest = HKD 120,000 x 3.087% ÷ 12 = HKD 308.7
1st Term Principal = HKD (10,168-308.7) = HKD 9,859.3
2nd Term Interest = HKD 110,140.7x 3.087% ÷ 12 = HKD 283.34You can find the details of your monthly repayment as follows:Please be reminded if you decide to repay your loans early after a certain period, the early repayment charges may outweigh the amount of interest saved. We also marked this period in our app to help you decide whether you will repay the loan in advance. We also marked this period in our app to help you decide whether you would like to repay the loan earlier than scheduled.All numbers are rounded to the nearest cent and are for reference only.

---

Was this article helpful?