blueskye30
New member
Solved: Thanks @subaru17 and others.
TL;DR: If I borrow ¥10,000,000 at my local bank for 10 years, the total repayment amount is ¥10,987,920. I can't reconcile that number with the advertised 1.9% annual interest rate. What is the correct formula?
I'm running a free loan simulation at Bank of Yokohama using https://www.boy.co.jp/entry_loan/pc/simulation/free.html
Input
Code:
お借入額 10,000,000円
ボーナス返済 なし
ご返済期間 10年
適用金利 14.6%*
* It shows as 14.6% but the table at https://www.boy.co.jp/kojin/free-loan/gaiyou.html says the rate is 1.9% if you borrow 10M.
Ouput
Code:
毎月のご返済額 91,566円
ボーナス月のご返済額 91,566円
返済総額 10,987,920円
保証料 0円
取扱手数料(税込み) 3,300円
収入印紙代 10,000円
諸費用合計 13,300円
10,987,920/10,000,000 is 1.0987, or 9.87% total cost after 10 years. Is that really the total cost? I can't reconcile that with the 1.9% annual interest. What formula should I use?
It seems awfully cheap. What am I missing? I only need to borrow 1.6M but that would mean a 14.6% interest. Borrowing 10M and investing the remaining 8.4M seems to give me a much better financial leverage than what's available with a margin account at Rakuten, so if the numbers are right it's very tempting!
Thanks.
Edit: also, are these bank loans usually fixed-interest? The language on the pages I read seem to suggest so, but if it's variable rate it's less appealing.