Download - Loan ion Schedule for a Housing Loan

8/6/2019 Loan ion Schedule for a Housing Loan

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Presented by

S . Swarupa Rani


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` Loan amortization is the distribution of a singlelump-sum cash flow into many smaller cash flowinstallments, which is determined by an

amortization schedule.` As far as banking and finance are considered, an

amortizing loan is one in which the principal of theloan is paid down over the life of the loan

` According to an amortization schedule, typicallythrough equal payments.


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` An amortization schedule is a table detailing eachperiodic payment on an amortizing loan (typically amortgage), which is generated by an amortizationcalculator.

` Amortization schedules run in chronological order.` The first payment is assumed to take place one full

payment period after the loan was taken out.

` The last payment completely pays off the remainder ofthe loan.

` Often, the last payment will be a slightly differentamount than all earlier payments.


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` In addition to banking, the bank, through itssubsidiaries, provides a range of financial services,which include life insurance, merchant banking,mutual funds, credit card, factoring, security trading,

pension fund management and primary dealership inthe money market.

It operates in four business segments:

` Treasury

` Corporate/Wholesale Banking

` Retail Banking and

` Other Banking Business.


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Location:State Bank ofIndia

zonal office

Nakala road

vijayawada.Persons interviewed:

Mr.Nageswara Rao, loan section and

Mr.Narayana Murty, clerk


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Loan Amortization Inputs:

A loan amortization schedule usually takes thefollowing inputs.

` Beginning Date The date where the loan is taken.

Payments are assumed to start 1` payment period after the Beginning Date.

` Loan Amount The amount that the lender will loan tothe borrower.

` Annual Interest rate The interest rate per year.` Payment Period The total number of payment

periods. This depends on the Payment


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` Frequency field below. If Payment Frequency selected isAnnually and Payment period is 10, it means 10 years. IfPayment Frequency is Monthly and Payment Period is 12,it

means 12 months.` Payments Frequency This specifies the frequency the

loan repayments take place.o Annuallyo Semi-Annuallyo Quarterly

o Bi-Monthlyo Monthlyo Weekly


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` Depending on this interest rate, the loan amountand the tenure of the loan.

` Loan amortisation of any loans are not issued inbranches of any bank.

` Loans are separetely handled and it has separatesection main branches of bank.

` There are lot of types in loan amortisation


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` Loan is a sum of money borrowed from a lender,which is to be repaid after a specified period oftime with interest charges.

` There are lots of loans given in a bank` Loan amortization for housing loans details each

periodic payment on amortizing loan(typicallymortgage)


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For example, here are the first few lines of an amortizationschedule for a 15-year, 10% fixed rate loan with an initialprincipal of $187,000

Balance Scheduled Balance Before Principal After

Payment Due date Payment Payment Interest Repayment Payment

1 1/15/93 $187,000.00 $2,009.51 $1,558.33 $451.18 $186,548.822 2/15/93 $186,548.82 $2,009.51 $1,554.57 $454.94 $186,093.88

3 3/15/93 $186,093.88 $2,009.51 $1,550.78 $458.73 $185,635.154 4/15/93 $185,635.15 $2,009.51 $1,546.96 $462.55 $185,172.605 5/15/93 $185,172.60 $2,009.51 $1,543.11 $466.41 $184,706.206 6/15/93 $184,706.20 $2,009.51 $1,539.22 $470.29 $184,235.907 7/15/93 $184,235.90 $2,009.51 $1,535.30 $474.21 $183,761.698 8/15/93 $183,761.69 $2,009.51 $1,531.35 $478.16 $183,283.53

9 9/15/93 $183,283.53 $2,009.51 $1,527.36 $482.15 $182,801.38


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Amortisation schedule is based on followingassumptions

` It should be known that rounding errors.

` Repetitive mortgage will decrease the principalbalance

` The payment on an amortized loan remains samefor entire loan term.


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Time value of money:

time value of money is different indifferent time period.

the value of some of money received infuture is less valuable than today.


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So these the above constraints that arerequired to prepare a loan amortization schedule

for a housing loan in State Bank ofIndia(SBI)


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Thank you

Download - Loan ion Schedule for a Housing Loan

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