Fiji Time: 5:14 PM on Wednesday 21 February

Fiji Times Logo

/ Front page / Archives » Article Index

Financial Literacy Understanding Basic Terms

Fca Proudly Supporting Fiji Financial Literacy
Tuesday, October 31, 2017

How is the interest on your loan calculated?

THE most common interest calculation method in both Fiji and the region is to use a table mortgage methodology.

This is a loan which has a recurring set payment which includes a combination of principal and interest over the term of the loan.

The interest is calculated on a daily balance basis and is debited to your loan monthly.

Thus each progressive payment results in the decline in the principal balance so eventually the loan is repaid in full.

In the early years the payments are mostly composed of interest, but as the amount you still owe begins to decrease, your regular repayment will include less interest and more principal. You can save a lot in interest cost by paying more than the calculated minimum monthly repayment.

Advantages:

* A key advantage of table mortgage is that it contains a set regular payment to be made at a set date which helps customers with managing their cash flow while providing them with the certainty of knowing what and when their payments will be.

* Another advantage is that as the mortgage interest is calculated daily, any early payments or payments larger than scheduled amount will result in less interest cost.

Disadvantage:

* People with irregular income may find it hard to service fixed regular payments.








Fiji Times Front Page Thumbnail

Kaila Front Page ThumbnailFiji Times & Kaila Frontpage PDF Downloads

Use the free Acrobat Reader to view.

Westpac
Code Inward TTs Outward TTs
CAD 0.63170.6127
JPY 54.204251.2042
GBP 0.35800.3500
EUR 0.40540.3934
NZD 0.68860.6556
AUD 0.63870.6137
USD 0.50450.4875

from

$0.00

Exchange Rate updated on 20th, February, 2018

Today's Most Read Stories

  1. Tears flow for eleven
  2. 'Fake profiles can't vote'
  3. Raj responds to criticism
  4. Nacamaki villagers resist relocation
  5. 862 dengue cases
  6. Winston memorial service
  7. Students chosen to lead
  8. Leaders pay tribute to victims
  9. Young minds share ideas at forum
  10. Forestry sector 'boom'

Top Stories this Week

  1. Long wait Monday (19 Feb)
  2. Plans to open caves for public viewing Monday (19 Feb)
  3. None like Gita Friday (16 Feb)
  4. Della S(h)aw love Thursday (15 Feb)
  5. Villagers cry foul Thursday (15 Feb)
  6. Masirewa scores biggest try Monday (19 Feb)
  7. Bitcoin rises above $20,175 Saturday (17 Feb)
  8. Adi Meretui joins SODELPA camp Monday (19 Feb)
  9. Sau's 7s aim Monday (19 Feb)
  10. Indian engineers to assess Fiji's railway network Monday (19 Feb)