Repayment schedule: Difference between revisions
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* fixed maturity '''date'''. | * fixed maturity '''date'''. | ||
== Repayment procedures of loans == | ==Repayment procedures of loans== | ||
There are four types of repayment procedures<ref>Morri G., Mazza A. (2014), p. 43</ref>: | There are four types of repayment procedures<ref>Morri G., Mazza A. (2014), p. 43</ref>: | ||
# bullet payments, | # bullet payments, | ||
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# [[plan]] with fixed payments. | # [[plan]] with fixed payments. | ||
== Example of repayment schedule == | ==Example of repayment schedule== | ||
Below is presented example of repayment schedule regarding mortgage. '''Sum''' of '''interest''' payment value and '''principal''' repayment value per payment period gives the '''monthly''' '''payment''' '''value'''. With the time, when more payments are done, amount of interest payment is '''decreasing''' and amount of principal repayment is '''increasing'''. It means that firstly great value of interest payment of mortgage is covered, after time the situation is changing and interest payment are smaller but principal repayment increases - in total, monthly payment still '''stays''' '''the''' '''same''' but the '''proportions''' between interest payment and principal payment are changing. Repayment schedule finishes when balance of loan account is zero, so when both interest payment and principal repayment are paid off. Below is shown example of the mortgage taken for 25 years with repayment schedule related<ref> Mayo H. B. (2013) p. 537 </ref>: | Below is presented example of repayment schedule regarding mortgage. '''Sum''' of '''interest''' payment value and '''principal''' repayment value per payment period gives the '''monthly''' '''payment''' '''value'''. With the time, when more payments are done, amount of interest payment is '''decreasing''' and amount of principal repayment is '''increasing'''. It means that firstly great value of interest payment of mortgage is covered, after time the situation is changing and interest payment are smaller but principal repayment increases - in total, monthly payment still '''stays''' '''the''' '''same''' but the '''proportions''' between interest payment and principal payment are changing. Repayment schedule finishes when balance of loan account is zero, so when both interest payment and principal repayment are paid off. Below is shown example of the mortgage taken for 25 years with repayment schedule related<ref> Mayo H. B. (2013) p. 537 </ref>: | ||
* '''type''': mortgage, | * '''type''': mortgage, | ||
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==Footnotes== | ==Footnotes== | ||
<references /> | <references /> | ||
{{infobox5|list1={{i5link|a=[[Loan amortization schedule]]}} — {{i5link|a=[[Flat interest rate]]}} — {{i5link|a=[[Amortization table]]}} — {{i5link|a=[[Short rate cancellation]]}} — {{i5link|a=[[Sinkable bond]]}} — {{i5link|a=[[Notice account]]}} — {{i5link|a=[[Breakage cost]]}} — {{i5link|a=[[Accrual rate]]}} — {{i5link|a=[[Unearned Premium]]}} }} | {{infobox5|list1={{i5link|a=[[Loan amortization schedule]]}} — {{i5link|a=[[Flat interest rate]]}} — {{i5link|a=[[Amortization table]]}} — {{i5link|a=[[Short rate cancellation]]}} — {{i5link|a=[[Sinkable bond]]}} — {{i5link|a=[[Notice account]]}} — {{i5link|a=[[Breakage cost]]}} — {{i5link|a=[[Accrual rate]]}} — {{i5link|a=[[Unearned Premium]]}} }} | ||
==References == | ==References== | ||
* Arora M., Singh S. (2017) [https://acfa.apeejay.edu/docs/volumes/envision-2017/envision-paper-10-vol-11-(2017).pdf | * Arora M., Singh S. (2017) [https://acfa.apeejay.edu/docs/volumes/envision-2017/envision-paper-10-vol-11-(2017).pdf ''Grass root Financial Management Practices of Self Help Groups in Himachal Pradesh: An Empirical Investigation''] in "ENVISION - International Journal of [[Commerce]] and [[Management]] No.62481 VOL-11" | ||
* Bai Y., Kim S. T., Mihalache G. (2017), [https://www.sunysb.edu/commcms/economics/research/papers/2017/BKM_1709.pdf | * Bai Y., Kim S. T., Mihalache G. (2017), [https://www.sunysb.edu/commcms/economics/research/papers/2017/BKM_1709.pdf ''The Payment Schedule of Sovereign Debt''], Stony Brook University | ||
* Chandra R. (2013), ''MBA in banking'', BookRix | * Chandra R. (2013), ''MBA in banking'', BookRix | ||
* Mayo H. B. (2013), ''[[Investments]]: An Introduction'', Cengage Learning | * Mayo H. B. (2013), ''[[Investments]]: An Introduction'', Cengage Learning | ||
* Morri G., Mazza A. (2014), ''Property Finance: An International Approach The Wiley Finance Series'', John Wiley & Sons | * Morri G., Mazza A. (2014), ''Property Finance: An International Approach The Wiley Finance Series'', John Wiley & Sons | ||
* Student Loans [[Company]] (2012), [http://www.studentloanrepayment.co.uk/pls/portal/docs/PAGE/RPIPG001/RPIPS001/RPIPS006/REPAYMENT_BOOK_EN_D.PDF | * Student Loans [[Company]] (2012), [http://www.studentloanrepayment.co.uk/pls/portal/docs/PAGE/RPIPG001/RPIPS001/RPIPS006/REPAYMENT_BOOK_EN_D.PDF ''Repaying your student loan''], Student Loans Company, Great Britain | ||
* Weltman B. (2008), ''JK Lasser's Small Business Taxes 2009: Your Complete Guide to a Better Bottom Line'', John Wiley & Sons | * Weltman B. (2008), ''JK Lasser's Small Business Taxes 2009: Your Complete Guide to a Better Bottom Line'', John Wiley & Sons | ||
{{a|Aleksandra Puchała}} | {{a|Aleksandra Puchała}} | ||
[[Category: Financial management]] | [[Category: Financial management]] | ||
Latest revision as of 04:40, 18 November 2023
Repayment schedule are timelines agreed between banker and borrower about paying the loan agreement [1]. The schedule is part of contractual terms. The repayment schedule is characterised by regularity so that payments are done on monthly, quarterly, half-yearly, yearly cycles. In the loan agreement, except of the repayment schedule, are included should be included also [2]:
Repayment procedures of loans
There are four types of repayment procedures[3]:
- bullet payments,
- semi bullet (interest-only payment),
- balloon payments,
- plan with fixed payments.
Example of repayment schedule
Below is presented example of repayment schedule regarding mortgage. Sum of interest payment value and principal repayment value per payment period gives the monthly payment value. With the time, when more payments are done, amount of interest payment is decreasing and amount of principal repayment is increasing. It means that firstly great value of interest payment of mortgage is covered, after time the situation is changing and interest payment are smaller but principal repayment increases - in total, monthly payment still stays the same but the proportions between interest payment and principal payment are changing. Repayment schedule finishes when balance of loan account is zero, so when both interest payment and principal repayment are paid off. Below is shown example of the mortgage taken for 25 years with repayment schedule related[4]:
- type: mortgage,
- amount of money in dollars: 150.000,
- rate of interest: 8%,
- fixed maturity date: 25 years,
- monthly payment: 1 158 $.
Repayment schedule
| Number of payment | Interest payment in dollars | Principal repayment in dollars | Balance of loan in dollars |
|---|---|---|---|
| 1 | 1 000 | 158 | 149 842 |
| 2 | 999 | 159 | 149 684 |
| 3 | 998 | 160 | 149 524 |
| ... | ... | ... | ... |
| 148 | 739 | 419 | 110 407 |
| 149 | 736 | 422 | 109 985 |
| 150 | 733 | 424 | 109 561 |
| ... | ... | ... | ... |
| 298 | 23 | 1 135 | 2 293 |
| 299 | 15 | 1 142 | 1 150 |
| 300 | 8 | 1 150 | 0 |
Footnotes
| Repayment schedule — recommended articles |
| Loan amortization schedule — Flat interest rate — Amortization table — Short rate cancellation — Sinkable bond — Notice account — Breakage cost — Accrual rate — Unearned Premium |
References
- Arora M., Singh S. (2017) Grass root Financial Management Practices of Self Help Groups in Himachal Pradesh: An Empirical Investigation in "ENVISION - International Journal of Commerce and Management No.62481 VOL-11"
- Bai Y., Kim S. T., Mihalache G. (2017), The Payment Schedule of Sovereign Debt, Stony Brook University
- Chandra R. (2013), MBA in banking, BookRix
- Mayo H. B. (2013), Investments: An Introduction, Cengage Learning
- Morri G., Mazza A. (2014), Property Finance: An International Approach The Wiley Finance Series, John Wiley & Sons
- Student Loans Company (2012), Repaying your student loan, Student Loans Company, Great Britain
- Weltman B. (2008), JK Lasser's Small Business Taxes 2009: Your Complete Guide to a Better Bottom Line, John Wiley & Sons
Author: Aleksandra Puchała
