It is becoming more common for banking entities to ask the client to take out a life assurance policy, as a means of guaranteeing the payment in case of death. The user can choose whichever entity for this purpose and is under no obligation to take out the policy proposed by the banking entity

Interest

This is the amount paid as a fee for the possibility of using a determined amount of borrowed money

The banking entities pay users certain amounts of money in the form of interest for the funds deposited in the bank (this is a "loan" from the users to the bank (see APR). The type of interest varies depending on the formula chosen, on the commercial policy of the entity in question and the amount of money deposited

The users pay interest for different types of operations that involve the use of the bank's money

Depending on the type of operation, the time limit and the amount in question, interest payable can vary tremendously. From being overdrawn in current account (for which interest is very high) to mortgage loans for purchase of the dwelling (for which low interest is paid) there is a whole range of possibilities that the user should take into account and study before choosing to undertake an operation

We must not forget that nominal interest is not the same as APR (which is the payment or real fee), and that it is this latter figure that is important to know.

Calculate the monthly payment yourself

To calculate the monthly payment on a loan we can use the tables included in the Annex. It works as follows: once we know the interest rate and the time limit for the loan for repayment, it is a question of looking in the tables to see where the two meet. The resulting figure is multiplied by the loan capital and we divide by 1.000.000. The result obtained is the monthly payment

Let us look at some examples to see the difference that exists between interests payable on a loan depending on the length of time for repayment

Thus for a capital of 12 million pesetas, an interest of 6% and a time limit of 10 years (120 months), the monthly payment will be :(see table Annex 1)

The total payable will be: 133.224 pts x 120 months = 15.986.880 pts. Of which interest will be: 3.986.880 pts
Thus, for loan capital 12 million pesetas, at interest of 6% and a time of 15 years (180 months), the monthly payment will be

The total payable will be: 101.268 pts. X 180 months = 18.228.240 pts. Of which interest will be: 6.228.240 ptsAs we can see in the end for a loan of 12 million pesetas we must pay

· In the case of 10 years: 15.986.880 pesetas
· In the case of 15 years: 18.228.240 pesetas