What are the loan repayment methods?
September 22, 2024
1) Annuity repayment has a fixed monthly payment. As repayment progresses, the absolute amount of the principal repayment gradually increases and the absolute amount of interest paid decreases. 2) Linear repayment takes place by repaying the same principal amount (i.e. the same share) throughout the investment period. The value of the absolute amount of interest paid is continuously decreasing. 3) One-time repayment. During the term of the loan, only interest is paid and the principal is repaid in one lump sum at the end of the loan term. The value of the absolute amount of interest paid is the same throughout the duration of the loan.
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