15-04-2020

The monthly amount that we can calculate for you in the above calculation is an approximation of the actual monthly burden. Due to rounding differences, this amount may differ slightly from the monthly charge that a lender calculates. Of course, in the end, the calculation of the bank is leading in what you will actually pay per month.

Monthly charge revolving credit

You cannot choose a loan form for the calculation: the monthly charge for a personal loan is calculated here. The amount you pay per month with a revolving credit does not depend on interest and term – it is simply a percentage (1%, 1.5% or 2%) of the agreed credit limit. If you have a limit of \$ 10,000 and a monthly charge of 2%, you pay \$ 200 per month.

Monthly charge = interest + repayment

The monthly charge of a loan consists of interest and repayment, both with a personal loan and with a revolving credit. The distribution of the monthly charge over interest and repayment works differently for these two loan types.

Interest and repayment on a personal loan

A personal loan is a fixed agreement: all data is recorded when it is taken out. The interest rate is fixed, the monthly amount and therefore also the term. Part of the interest is always taken from the fixed monthly amount (calculated on the outstanding debt) and the rest is repaid on the loan. The monthly amount is calculated exactly so that you have repaid the entire loan at the end of the term.

Interest and repayment with revolving credit

Revolving credit is much more flexible: the credit limit is fixed there and the monthly amount is no more. The monthly amount is a percentage of the agreed limit. After collecting the monthly amount, it is first calculated how much interest (the percentage is variable) you owe on the outstanding debt (which can vary because you can repay and withdraw amounts at your own discretion).

What remains of the monthly amount is used for repayment. Because you do not know in advance how the interest rate will develop and you do not know how it will go with withdrawals and repayments, you cannot know in advance how long you will take to repay the revolving credit.

Higher monthly amount = ready faster and lower costs

Can you miss more than the monthly amount we calculated for you above? Then look at what comes out if you choose a shorter term. Then the monthly amount increases, but you get rid of your loan faster. This ensures that you ultimately pay less in total: the total costs are lower. The faster you pay off on your loan, the less interest you have to pay.