Amortized Loan: Predictable Payments Over Time

Amortized loans are the most common type of consumer loans. In this structure, borrowers make regular, fixed payments over the loan's term. Each payment covers both interest and a portion of the principal, gradually reducing the loan balance until it is fully paid off at maturity. Common examples include mortgages, car loans, student loans, and personal loans. Because payments are predictable, this type of loan is ideal for budgeting and long-term financial planning. When people casually refer to a 'loan,' they are usually speaking about this type. For specific financial scenarios, the calculators below can provide detailed computations and personalized results.

Amortized Loan Example

Consider a $100,000 loan with a 6% annual interest rate over 10 years, paid monthly:

• Monthly Payment: Rp 1.110,21
• Total of 120 Payments: Rp 133.224,60
• Total Interest: Rp 33.224,60

With an extra $100 monthly payment:

• Monthly Payment: Rp 1.210,21
• Total of 107 Payments: Rp 129.328,89
• Total Interest: Rp 29.328,39

Deferred Payment Loan: Lump Sum Payment at Maturity

Deferred payment loans delay repayment until the loan reaches maturity, at which point the borrower repays the full principal and accumulated interest in a single lump sum. This loan type is common for commercial transactions, short-term business financing, and some specialized personal loans. While no regular payments are required during the loan term, the final payment can be substantial, making it crucial for borrowers to plan carefully. This category also includes certain types of balloon loans, where smaller payments may be made during the term, but a large final payment is still required at the end.

Deferred Payment Loan Example

For a $100,000 loan with a 6% annual interest rate over 10 years, compounded annually:

• Amount Due at Maturity: Rp 179.084,77

(Note: This is paid as a single lump sum at the end of the term.)

Bond: Fixed Payout at Maturity with Market Variability

Bonds are a specialized form of loan issued primarily by corporations and governments. Unlike traditional loans, bonds have a fixed maturity date at which the principal amount—known as the face value—is repaid to the bondholder. There are two main types of bonds: coupon bonds and zero-coupon bonds. Coupon bonds pay periodic interest (called coupons), usually annually or semi-annually. Zero-coupon bonds, on the other hand, do not make interest payments during the term but are sold at a discount and pay the full face value at maturity. Investors should note that while the repayment amount is fixed, bond prices fluctuate based on market conditions and interest rates, affecting their resale value before maturity.

Bond Example

A $100,000 bond with a 6% annual discount rate over 10 years, compounded semi-annually:

• Present Value: Rp 55.839,48
• Face Value at Maturity: Rp 100.000,00

(Note: The present value reflects the bond's market price today.)

Loan Fundamentals: What Every Borrower Should Know

Understanding Interest Rates

Interest is the cost of borrowing money, typically expressed as a percentage of the loan amount...

How Compounding Frequency Affects Your Loan

Compounding determines how often accrued interest is added to the loan balance...

Loan Term: Balancing Time and Total Cost

The loan term is the length of time over which the loan will be repaid...

Types of Consumer Loans

Secured Loans: Borrowing with Collateral

Secured loans require the borrower to offer an asset...

Unsecured Loans: Borrowing Based on Creditworthiness

Unsecured loans do not require collateral, but lenders rely heavily on the borrower's credit history...

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