What happen if you take out a Loan or borrow money !!

Updated: Nov 19, 2019

If you take out a loan or borrow money, you will pay INTEREST, interest get added to your loan amount and accumulate monthly, your installment or repayment then reduce your loan amount and interest charged against your account ...

This interest will increase your loan amount if you do not pay your debt in time or even if you do not pay more than your interest amount charged on your loan ...

Interest over a longer period could be a very large amount, therefor the shorter the period of the loan, the better ...

Example:- Do not borrow over 72 months when you buy a vehicle, it will improve your affordability, but you will pay more in interest and increase your loan amount ...

= If you have to borrow money or make a loan, make the repayment period as short as possible

Look at this: Loan R500,000 @ 10% over 20 years .... Total Loan R1,174,585-97

- Interest only R658,025.97 more than the original Loan amount

- Over 10 years interest reduce to R292,904 and total cost to R801,184-42

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