Investment and Loan Tips

December 14 | Filed under Loans Advice | Share this post

Here are some terms related to loans. Capital depreciation means reimbursing capital without taking into account interest changes. The interest is the remuneration for the lender. Annuities or monthly or trimester sums are taken periodically for the reimbursement and the interest charge. Therefore annuity means yearly capital depreciation added to yearly interest.

There are three types of reimbursement: in fine, constant capital depreciation (the same amount of capital reimbursed every year) or constant annuity (the same annuity every year). In the case of the credit in fine the interest is adjusted according to the first constant annuities. The capital is reimbursed once after the interest payment or after the following annuities.

This disposition is associated to an interest when the interests’ reimbursement is more strongly deductible during the first years, for example for a home investment, according to the law.

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