If you have a credit card or bank loan to buy a house, you will have to pay interest (or finance fees) on the money you borrow based on a certain annual percentage. This percentage of interest is called the Annuity Interest Rate (SBA) which can be calculated easily if you know what factors to take into account and have a little knowledge of algebra. However, calculating the SBA for a mortgage loan is different from calculating the SBA for a regular loan because there are additional fees charged to cover your debt. Learn both ways of calculating by reading the following steps.
Step
Part 1 of 3: Understanding the Meaning of the Annuity Interest Rate (SBA)
Step 1. Know that there are fees to be paid for borrowing money
You will have to spend more money than you receive if you borrow money from a credit card or buy a house on a mortgage loan. If you get credit approval, the lender will ask you to repay your loan principal plus a finance fee for the luxury you get from the money you have received. This finance charge is called the Annuity Interest Rate (SBA).
Step 2. Know that the SBA to calculate the amount of the annual interest fee can be divided into monthly or daily interest payments
For example, if you borrow Rp. 100 million with a 10% SBA, you will have an interest obligation of Rp. 10 million, or 10% of the principal of the loan of Rp. 100 million.
- However, lenders can adjust this figure and ask you to pay each month. If you want to know the interest rate for a monthly period, divide the SBA by 12. 10%: 12 = 0.83%. So every month, like your loan interest is 0.83%.
- Lenders can also charge the SBA on a daily basis. If you want to know the interest rate for the daily period, divide the SBA by 365. 10%: 365 = 0.02%. So every day, your loan interest rate is 0.02%.
Step 3. Recognize that there are three types of SBAs namely fixed, variable, and tiered SBAs
The SBA remains the same amount throughout the loan period or credit card active period. SBA variable amount fluctuates every day, so people who borrow money (debtors) do not know how much interest they have to pay. The amount of the tiered SBA depends on the principal on which the interest is calculated.
Step 4. Be aware that the SBA in Indonesia can currently reach 36%, and this figure varies from country to country depending on economic conditions and respective financial policies
This interest rate is not a small number, especially if you are unable to pay off the principal of your loan. Fixed SBA is usually slightly below 36%, and variable SBA is usually slightly above 36%.
Step 5. Know that you don't have to pay interest if you always pay off your credit card bills
If you shop with a credit card of IDR 5 million but you pay the entire bill when it is due, the SBA is not applied to your loan. Try to pay off credit card bills on time so you don't have to pay interest and maintain your credibility if you need to do a credit history check through BI Checking.
Part 2 of 3: Calculating SBA for Credit Cards
Step 1. Find out your current bill balance or the amount you owe from using a credit card through the latest billing statement
For example, let's say your current debt balance that will be charged by the SBA is IDR 25 million.
Step 2. Calculate the interest rate on your credit card usage based on the latest billing statement
Suppose there is an interest fee of IDR 250 thousand in your billing statement.
Step 3. Divide the interest expense by the amount you owe
IDR 250 thousand: IDR 25 million = 0.01
Step 4. Multiply your answer by 100 to get a number as a percentage
This is the interest rate on the loan that is charged to you every month.
0.01 x 100 = 1%
Step 5. Multiply the monthly interest rate by 12
The answer you get is the percentage interest rate of the annuity known as the "SBA."
1% x 12 = 12%
Part 3 of 3: Calculating SBA for Mortgage Loans
Step 1. Look for an online calculator to calculate the SBA
Type "mortgage interest calculator" into a search engine and open the link that appears.
Step 2. Determine the amount you want to borrow and then enter this number in the specified field on the calculator
Just as an example, let's say you want to borrow Rp. 300 million.
Step 3. Enter the additional cost to guarantee your loan in the fields specified in the calculator
For example, there is an additional fee of Rp. 750 thousand.
Step 4. Enter the predetermined interest rate as the annual interest rate at no additional cost
For example, we will calculate with an interest rate of 6.25% per year.
Step 5. Enter the term of your mortgage loan
In general, the term of mortgage debt is 30 years.
Step 6. Press the "calculate" button to find out the amount of the SBA which will be different from the interest rate, and this figure is the actual cost of the loan based on the amount you borrowed
- The SBA of the mortgage in the example above is 6.37%.
- The total payment of the loan principal and interest is Rp1,847,000.00.
- The total interest cost on the mortgage in the example above is $364,975,000,00 so the total mortgage payable will be $664,920,000,00 (1,847,000 x 30 x 12.)
