In fact, credit cards, cash loans, consumer finance and other products are mostly equal repayment, and their interest rates cannot be directly compared with other repayment methods, because in other repayment methods, the borrower only pays interest on the principal currently occupied, while the equal repayment method pays interest on the repaid principal.
For example, Xiao Zhang bought a 6000 yuan mobile phone in two installments with a credit card. The first repayment is 3060 yuan, of which the principal is 3000 yuan and the interest is 60 yuan. The next month, he still paid 3060 yuan, and the proportion of principal and interest remained unchanged. However, the principal occupied in these two months is different. If you spend 6000 yuan in the first month and 3000 yuan at the end of the month, then you only spend 3000 yuan in the second month, and the interest algorithm is still 1% multiplied by the total loan amount. Formally, consumers pay for the repaid principal. The following is a screenshot of the credit card installment order page of China Merchants Bank.
Figure 1: The interest amount of each installment will not decrease, and the total loan amount will always be 6,000 yuan.
If calculated according to the rule that the borrower only pays interest on the principal currently occupied, Xiao Zhang pays interest at the monthly interest rate of 1% in the first month and 2% in the second month. Suppose Xiao Zhang borrows 12000 yuan and repays it in 12 installments. The principal of each installment is 1000 yuan and the interest is 79.2 yuan. Its real interest rate is shown in the following figure. The "real interest rate" mentioned in this paper refers to the interest rate obtained according to the rule of "paying interest only for the principal currently occupied".
Figure 2 The real monthly interest rate varies with the number of periods, from 0.66% to 7.92%.
It can be seen that the interest rate in the first month was indeed 0.66%, but with the passage of time, more and more principal was repaid, less and less occupied, and its real interest rate gradually rose, eventually reaching 7.92%, that is, annualized 95.04%. So on average, what is the actual borrowing cost of equal interest? Let's look at it through the following model.
The idea of the model is this: Xiao Zhang borrows money to invest in a current financial management project. After investing for one year, lock the financing cost at the monthly interest rate of 0.66%, and wait for this interest rate to repay, and see how much the rate of return of this wealth management project can reach to protect the capital. Suppose that the money that Xiao Zhang uses to repay the loan every month comes from the current project. He used the investment income first, and then used the principal to make up the difference. After paying off the last installment, the money left in Xiao Zhang's hand is the investment income. By constantly adjusting the monthly rate of return, Xiao Zhang's final investment income is zero, that is, breakeven, and the investment income just covers the financing cost. Schematic diagram is as follows.
Figure 3 Schematic diagram of financing and investment mode
Traverse 10000 data, and the monthly return rate is1.41%~1.42%, according to the accuracy of one billionth. When the current monthly rate of return is 1 .41721599% (about1) under the above conditions, the equal interest financing cost with a monthly interest rate of 0.66% and the monthly interest rate are 1.4 17%. It can be said that according to the rule that "the borrower only pays interest on the principal currently occupied", the installment repayment cost of China Merchants Bank 12 is 17%. If only 0.66% is multiplied by 12 to get the annualized interest rate of 7.92%, then the cost of installment is underestimated.
According to the same method, the actual annualized interest rates of equal interest 1%~5% are respectively
Figure 4 Comparison Table of Equal Interest Rate Monthly Interest Rate and Actual Annualized Interest Rate
Only in this way can we accurately evaluate the financing costs of various consumption stages, cash loans and credit cards. The following are the real annualized interest rates of several common consumption stages, all of which are divided into 12 stages, which are sorted from high to low.
Figure 5 Actual annualized interest rate of general consumer finance installment and bill installment
JD。 The handling fee of COM is very low, and everyone has the highest staging rate, which is a bit of a standout. It is worth mentioning that everyone in this issue was made by the original everyone team, and everyone died of poor products. This issue of "Everyone" is quite intended to follow the martyrs. The most humorous thing is that the website marked the words "service fee reduction" before the installment rate. The rest is concentrated in 17%~ 19.54%, with little difference.