Today, people have understood the importance of savings and investments, and most of us do it regularly in order to get sizeable corpus to fulfil any financial goal. However, there comes a situation in almost everyone’s life that the money is required irrespective of savings. Here, the only option remains is to borrow money from someone, especially from the bank or financial institutions.
We can’t say the loan is the necessity in our life, but at one or the other instance, we need money desperately, and loans are availed. Banks also do understand the need for money in our life and are always ready to provide multiple types of loans that suit our needs best. The gulf countries like Kuwait welcome thousands of people every year for employment purpose. These expats need money in order to sustain their lifestyle. Furthermore, the residents or natives also have their own financial requirements. What do you think of while opting for a particular loan? It is seen that people go for the bank that offers comparatively competitive rates. Bearing this in mind, Kuwait bank rates for loans are desirable and help you get the more at given instalments. This is all because of the reducing balance method used while calculating the instalment. Regular Calculation Since long when the loan offers were initiated, the regular method was used, such as the instalment on the loan amount were decided throughout the tenure. E.g., if you are taking a loan of KD 50 thousand for 10 years, at a low interest of 6%, the instalment for the entire tenure would be fixed. This ultimately results in spending some extra amount on loan. However, to attract more people towards loans, banks today offer instalments that are calculated with another method, which is advantageous too. Reducing Balance Method Using this method, availing the loan has become more beneficial for the people. The principal amount of KD 50 thousand needs to be repaid, no doubt. But the instalment amount reduces as you pay it month on month. It is due to the amount is calculated on the remaining loan amount after each interval of repayment. This ultimately reduces your instalments and saves a lot of money. Kuwait bank rates are kept standard for most of the loans, which is 6% per annum. If you are confused in calculating the instalment entirely manually, you can use loan calculators available on the website of your bank. This way, you can get the exact amount of the instalment for a specific amount and for the particular tenure.
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August 2022
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