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Uttara Finance Interest Calculation Sheet-With Practical Examples:
Uttara Finance, a well-known financial institution, offers various types of loans to its customers, including personal loans, business loans, and vehicle loans. In this explanation, I will break down the types of loans offered by Uttara Finance and give practical examples to help you understand how these loans work in real-life scenarios.
1.Personal Loan:
A personal loan is typically an unsecured loan given to individuals based on their income, credit history, and financial situation. These loans can be used for various purposes such as medical emergencies, education, home renovation, or vacation.
Features:
Loan Amount: Depends on the individual's income and repayment capacity.
Interest Rate: Fixed or variable, depending on the terms and conditions of the loan.
Tenure: Usually 12 to 60 months (1 to 5 years).
Repayment: Monthly EMI (Equated Monthly Installment).
Practical Example:01
Imagine you need a personal loan to finance your wedding, which is expected to cost around 500,000 BDT. You apply to Uttara Finance and based on your income and creditworthiness, you are approved for the loan at an interest rate of 12% per annum for 3 years.
Loan Amount: 500,000 BDT
Interest Rate: 12%
Tenure: 36 months (3 years)
You will need to repay the loan in monthly installments (EMIs) that include both principal and interest. At the end of 3 years, you would have repaid the entire loan amount along with interest.
2.Business Loan:
Uttara Finance provides business loans to help small, medium, and large businesses to finance their working capital requirements, purchase of equipment, expansion, etc. These loans can be secured or unsecured based on the business's financial health and the collateral provided.
Features:
Loan Amount: Depends on the business's revenue and collateral.
Interest Rate: Typically, lower than personal loans, as business loans may be secured.
Tenure: Flexible, often from 6 months to several years.
Repayment: Monthly EMI.
Practical Example:02
Let's say you own a small clothing retail shop, and you need to expand your store. The total cost of expansion is 1,000,000 BDT, and you decide to apply for a business loan from Uttara Finance.
Loan Amount: 1,000,000 BDT
Interest Rate: 10% per annum
Tenure: 5 years (60 months)
You will provide some assets (like your existing store property) as collateral. Based on your revenue and the asset provided, you get the loan at a 10% interest rate. You will need to repay the loan through monthly EMIs, which will include both principal and interest.
3.Vehicle Loan:
A vehicle loan is a loan provided by Uttara Finance to purchase a new or used car, motorcycle, or commercial vehicle. The vehicle itself often serves as collateral for the loan.
Features:
Loan Amount: Typically, up to 80-90% of the vehicle's price.
Interest Rate: Generally, ranges from 10% to 15% per annum.
Tenure: Usually 1 to 7 years.
Repayment: Monthly EMI.
Practical Example:03
Suppose you want to buy a new car worth 1,500,000 BDT, but you only have 300,000 BDT available for a down payment. You apply for a vehicle loan with Uttara Finance for the remaining 1,200,000 BDT.
Vehicle Price: 1,500,000 BDT
Down Payment: 300,000 BDT
Loan Amount: 1,200,000 BDT
Interest Rate: 13% per annum
Tenure: 5 years
In this case, you will need to repay the loan amount (1,200,000 BDT) over 5 years through monthly EMIs. The total amount you repay will include both principal and interest.
4. Home Loan:
Uttara Finance also offers home loans to customers who wish to buy, construct, or renovate their homes. Home loans are typically long-term loans, and the property being purchased or constructed often serves as collateral.
Features:
Loan Amount: Typically, up to 80% of the property value.
Interest Rate: Around 8-12% per annum, depending on the loan type.
Tenure: 5 to 25 years.
Repayment: Monthly EMI.
Practical Example:04
You wish to buy a house worth 5,000,000 BDT, but you can only afford to make a down payment of 1,000,000 BDT. You apply for a home loan for the remaining 4,000,000 BDT.
Home Price: 5,000,000 BDT
Down Payment: 1,000,000 BDT
Loan Amount: 4,000,000 BDT
Interest Rate: 10% per annum
Tenure: 20 years (240 months)
Based on this, Uttara Finance will provide you with a loan of 4,000,000 BDT at 10% annual interest rate, which you will repay over 20 years with fixed monthly payments.
5.Education Loan:
Uttara Finance may also offer education loans to students pursuing higher education either domestically or abroad. The loan can cover tuition fees, living expenses, and other educational costs.
Features:
Loan Amount: Varies based on the course and institution.
Interest Rate: Typically, lower than personal loans.
Tenure: Varies; generally, repayment begins after course completion.
Repayment: Flexible, with an EMI structure that starts after completion of studies.
Practical Example:05
Imagine you are a student seeking to pursue a master's degree abroad, and the total cost of your education (including tuition fees and living expenses) is 2,500,000 BDT. You apply for an education loan from Uttara Finance.
Loan Amount: 2,500,000 BDT
Interest Rate: 8% per annum
Tenure: 10 years
Repayment: You begin repaying the loan 6 months after completing your studies.
In this case, Uttara Finance will disburse the loan amount in installments as per your academic schedule, and after completion of your studies, you will begin paying the loan back with monthly EMIs.
6.Consumer Durable Loan:
This is a loan designed for the purchase of consumer goods such as electronics, furniture, or home appliances.
Features:
Loan Amount: Usually up to 80% of the product's value.
Interest Rate: Can range from 12% to 18% per annum.
Tenure: Short-term, often 6 to 24 months.
Repayment: Fixed monthly EMI.
Practical Example:07
Suppose you want to buy a new laptop worth 100,000 BDT. You decide to take out a consumer durable loan to cover the cost.
Laptop Price: 100,000 BDT
Down Payment: 20,000 BDT
Loan Amount: 80,000 BDT
Interest Rate: 15% per annum
Tenure: 12 months
In this case, you would pay 80,000 BDT through monthly installments, which would include both principal and interest, over 12 months.
In Finally:
Uttara Finance offers a wide range of loan products that cater to personal, business, and consumer needs. These loans come with flexible repayment terms and competitive interest rates. The key to securing a loan is to understand your financial requirements, evaluate the terms carefully, and choose the loan product that best fits your needs and repayment capability.