Now a day’s economic condition of a person can suffer any time. In such situations they have no other option than to take a loan for themselves or for some other personal situation. One can apply for a personal due to medical reason. Some might opt for a personal loan for his or her family like for vacation or education. To buy an expensive article like an air conditioner or computer then also one might take a personal loan. But before taking a loan one should be aware of all the types of rate of interest that are now there in the market.
Different types of rate of interest on loans
People in hard economic situations may sometime need to borrow money from lenders and other institutions. When they are going to pay the money back at that time they have pay extra amount of money. The calculation by which we come to know how much extra money we have to pay is called interest rate. There are differ ways to calculate interest rate which are described below.
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Simple interest – The term simple interest represents the most common type of interest rate. Thus simple interest does not change and is paid only one time. Take an example. Let us say a person has borrowed 100 dollar which becomes the principal for one year. The rate of the interest at which the money is borrowed be 10%. So applying the simple interest rate after one … Read More