here are some tables for those wondering the comparison of the personal loan rate and the credit card interest rates...

Personal loan rate 12%
Equivalent credit card rate
1 yr 21.457%
2 yrs 21.571%
3 yrs 21.200%
4 yrs 20.754%
5 yrs 20.310%


Personal loan rate 10%
Equivalent credit card rate
1 yr 17.972%
2 yrs 18.157%
3 yrs 17.918%
4 yrs 17.600%
5 yrs 17.274%


Personal loan rate 8%
Equivalent credit card rate
1 yr 14.452%
2 yrs 14.677%
3 yrs 14.548%
4 yrs 14.345%
5 yrs 14.125%

as an example i loan 10000rm personal loan at the 12% rate 5 years i would have to pay 266.67rm back every month, however if i did not take the personal loan and choose to pay back to the credit card at 266.67rm every month, the credit card interest would have to be 20.31% instead of 18% for the final balance to be 0 at the 60th month. if the credit card uses 18% i would be able to finish paying on the 56th month with 266.67 monthly. this example ignores the 5% minimum payment of credit cards...

in some cases the personal interest rate of 12% is an illusion that it is lower than the 18% credit card rate. the equivalent credit card rate was calculated from using the excel tools->solver function to reverse calculate. correct me if wrong, hey i am also learning

2 cents

This post has been edited by mouldybread: Mar 25 2009, 03:57 PM

er, i dont think my tables represent the same thing as what you are trying to convey, my tables represent what the credit card interest has to be in order for the last month of the tenure loan duration to be equals to zero while yours is the profit interest charged by the bank. ok a bit confusing let me put some examples from excel.

for a 1 year 10k 12% personal loan
monthly payment 933.33
int on remaining principle
interest
21.4571843

1st column:month
2nd column:principle+interest
3rd column:2nd column-monthly payment
1 10,179 9,245
2 9,411 8,477
3 8,629 7,696
4 7,833 6,900
5 7,023 6,090
6 6,199 5,266
7 5,360 4,426
8 4,506 3,572
9 3,636 2,703
10 2,751 1,818
11 1,850 917
12 933 0


for a 5 years 10k 12% personal loan

monthly payment 266.66

int on remaining principle
interest
20.30999876
1st column:month
2nd column:principle+interest
3rd column:2nd column-monthly payment
year1
1 10,169 9,903
2 10,070 9,804
3 9,969 9,703
4 9,867 9,600
5 9,763 9,496
6 9,657 9,390
7 9,549 9,282
8 9,440 9,173
9 9,328 9,061
10 9,215 8,948
11 9,100 8,833
12 8,982 8,716
year2
1 8,863 8,597
2 8,742 8,475
3 8,619 8,352
4 8,494 8,227
5 8,366 8,100
6 8,237 7,970
7 8,105 7,838
8 7,971 7,704
9 7,835 7,568
10 7,696 7,429
11 7,555 7,288
12 7,412 7,145
year3
1 7,266 6,999
2 7,118 6,851
3 6,967 6,700
4 6,814 6,547
5 6,658 6,391
6 6,499 6,233
7 6,338 6,072
8 6,174 5,908
9 6,008 5,741
10 5,838 5,572
11 5,666 5,399
12 5,491 5,224
year4
1 5,312 5,046
2 5,131 4,864
3 4,947 4,680
4 4,759 4,493
5 4,569 4,302
6 4,375 4,108
7 4,178 3,911
8 3,977 3,710
9 3,773 3,507
10 3,566 3,299
11 3,355 3,088
12 3,141 2,874
year5
1 2,923 2,656
2 2,701 2,434
3 2,476 2,209
4 2,246 1,980
5 2,013 1,746
6 1,776 1,509
7 1,535 1,268
8 1,290 1,023
9 1,040 774
10 787 520
11 529 262
12 267 0

for me to compare the credit card interest rate which they charge monthly, i also have to use a monthly rest way to calculate the equivalent interest rate to have a more direct picture. if my tables are wrong please tell me.

for the rule 78 ive googled for some reference


This is what i get for using the 78 rule for 5 years

loan 10000
total month 1830
int charged 6000
interest 12%

1st colum:inverse month
2nd column:month
3rd column:int charged
4th column:rm
60 1 0.03279 196.72
59 2 0.03224 193.44
58 3 0.03169 190.16
57 4 0.03115 186.89
56 5 0.03060 183.61
55 6 0.03005 180.33
54 7 0.02951 177.05
53 8 0.02896 173.77
52 9 0.02842 170.49
51 10 0.02787 167.21 sum 1 to 12 mnth
50 11 0.02732 163.93 int rm
49 12 0.02678 160.66 0.35738 2144.26
48 13 0.02623 157.38
47 14 0.02568 154.10
46 15 0.02514 150.82
45 16 0.02459 147.54
44 17 0.02404 144.26
43 18 0.02350 140.98
42 19 0.02295 137.70
41 20 0.02240 134.43
40 21 0.02186 131.15
39 22 0.02131 127.87 sum 13 to 24 mnth
38 23 0.02077 124.59 int rm
37 24 0.02022 121.31 0.27869 1672.13
36 25 0.01967 118.03
35 26 0.01913 114.75
34 27 0.01858 111.48
33 28 0.01803 108.20
32 29 0.01749 104.92
31 30 0.01694 101.64
30 31 0.01639 98.36
29 32 0.01585 95.08
28 33 0.01530 91.80
27 34 0.01475 88.52 sum 25 to 36 mnth
26 35 0.01421 85.25 int rm
25 36 0.01366 81.97 0.20000 1200.00
24 37 0.01311 78.69
23 38 0.01257 75.41
22 39 0.01202 72.13
21 40 0.01148 68.85
20 41 0.01093 65.57
19 42 0.01038 62.30
18 43 0.00984 59.02
17 44 0.00929 55.74
16 45 0.00874 52.46
15 46 0.00820 49.18 sum 37 to 48 mnth
14 47 0.00765 45.90 int rm
13 48 0.00710 42.62 0.12131 727.87
12 49 0.00656 39.34
11 50 0.00601 36.07
10 51 0.00546 32.79
9 52 0.00492 29.51
8 53 0.00437 26.23
7 54 0.00383 22.95
6 55 0.00328 19.67
5 56 0.00273 16.39
4 57 0.00219 13.11
3 58 0.00164 9.84 sum 49 to 60 mnth
2 59 0.00109 6.56 int rm
1 60 0.00055 3.28 0.04262 255.74

total 1.00000 6000


did i get it correct? so the table for respective year interest charged for a 5 year loan is
yr1 35.7%
yr2 27.9%
yr3 20.0%
yr4 12.1%
yr5 4.3%

my table seems different from yours, enlighten me please?

the tables somehow does not display correctly, let me try and edit...
this is so not table display friendly! hope that the readers can see what the tables mean.

2 cents

This post has been edited by mouldybread: Mar 26 2009, 10:47 AM