Financial Knowledge

Don’t be foolishly confused about the rates and interest rates in car loans!

March 31, 2020

With the change of people’s consumption concept and the growth of personal investment demand, loan car purchase has become the mainstream mode of car purchase. However, in the process of loan and car purchase, there is often a situation where “interest rate” and “rate” are not clearly distinguished. Although the two values are very similar, the difference is 1-2 times.

The rate refers to the rate of paying fees; there is no car loan interest rate in the installment purchase of credit card, but there is a handling fee to be charged. Basically, the installment rate is between 3.5% and 11%, and the applicable credit limit is 20000-200000. There are 12, 24 and 36 installments.

Interest rate refers to the ratio between the amount of interest and the amount of loan within the loan term determined when the loan buys a car. Compared with bank car loan and credit card installment, the traditional bank car loan business mostly uses interest rate calculation. The interest rate is calculated by 8%, the loan is 100000 yuan, and the monthly repayment is 8698.84 yuan in the form of equal principal and interest. The total repayment of 12 phases is 104386.1 yuan, and the total interest paid is 4386.1 yuan.

Charge method.

If the fee is calculated according to the “rate”, the fee shall be paid once.

Most of the interest calculated according to “interest rate” is amortized.

The service charge calculated according to the “rate” must be settled even if the repayment is to be made in advance.

Interest calculated according to “interest rate”. If you want to prepay, the interest calculation shall be subject to the date when you pay off the principal and interest of the bank.

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