Understanding Amortization Schedule


An Excel Amortization Schedule

The statement of repayment is the most important part, when you are going to take a loan. It tells you the amounts you are required to pay the bank on monthly basis. The repayment schedule is popularly known as Amortization schedule. It is numbers and calculations which confuses most of the people. But once you understand the Amortization schedule you can take charge of paying and nobody can fool around with you. Not even the bank people. MS-Excel can be used to make a schedule.

Today we are just going to start with understanding a few terms that are used in the schedule. They are technical but very easy to understand They are:

  • Principal: The total amount that you have borrowed from the bank. For example if you have applied for $ 30000 loan and the granted loan amount is $ 25000 then your principal is the $25000 you receive from the bank. It is not the application amount of $30000 but the loan amount actually received $25000.
  • Interest rate: A percentage of the Principal will be charged by the bank. This is the fees for using the bank’s money. It will be the part of your installment every month.
  • Term – The period for which the loan is granted is called the term. For example if you are getting you $25000 loan for 48 months then 48 months is the term of the loan.
  • Amortization –The table showing the monthly installments is called the Amortization schedule. It will have all the terms discussed above.

After understanding the terms you will be better equipped to handle the repayment of the loan. For more information you can visit ferratum UK.They have an amazing collection of blogs which will make you understand about various kinds of loans. Also there are amazing online calculators which you can use.


Dealing with emotional problems of debt

Loans are tricky business. If you don’t manage your income and debt payments right, chances are high that you would end up in some trouble. But, there is actually nothing wrong with this situation. The economy is undergoing through some problems, and a lot of fields are changing. This means that people have lost their earning power, but they are still required to spend a lot of money. If you are in debt and you feel like it has spun out of control, you should remember that it could have happened to any body.

Debt Counselling

Acceptance is the first step towards figuring out a solution for your debt problems. You need to accept that you are in trouble, so that you can start coming up with a solution. Do not keep the debt situation a secret from those closest to you- they are the ones who are most likely to help you get through this complicated time. This would not be a bad time for you to seek professional help either- this would help solve your financial and emotional problems.

A lot of people do not seek help when they realize they are in deep debt, and this traps them in a never-ending cycle of more borrowings and increasing debt. Do not let that happen to you- you are still in charge of your life, and you can certainly take all of that back.

How soon should you start repaying your loan?

Living in debt can be really complicated, and a lot of people end up making mistake because of the same. People only have so much money, and it can be really confusing to prioritize at this point of time, as well. So, what do you do with your income? How do you start repaying your loan? Should you focus on repaying the loan or divert more of your attention towards saving for the future?

There is no single correct answer. There are some people who prefer starting their loan payments earlier on so that they don’t end up spending a high amount of money in the form of interest. However, this depends on your income and your current major expenditures. It is easier for you to start early payments on your loan if you are single and do not have a family to worry about.

Loan Repayment

If you do have a family and you want to stay ahead of your loan payments, you would have to be very careful about your expenditures and make sure that you save as much money as you possibly can. This way, you will be able to pay back your loans without your savings suffering a huge setback.