Even if you pay back 30,000 yen, the principal only decreases by 7,500 yen
[Main Text]
Even those who have never used a card loan
might think, "If I make my monthly payments properly, it will eventually be over."
However,
when you look at the actual repayment structure in numbers,
a quite different picture emerges.
For example,
suppose you borrow 1.5 million yen at an annual rate of 18%.
With card loans,products with an upper interest rate limit of around 18% per year are not uncommon.
Calculating one month's interest, it becomes
1.5 million yen × 18% ÷ 12 months = 22,500 yen
.
Assuming the monthly repayment amount is 30,000 yen.
30,000 yen - 22,500 yen = 7,500 yen
In other words,
even if you pay back 30,000 yen,
the principal that decreases in the first month is only 7,500 yen.
The outstanding balance for the following month is
1.5 million yen - 7,500 yen = 1,492,500 yen
.
The interest for the next month is
1,492,500 yen × 18% ÷ 12 = approximately 22,387 yen
.
Then,
30,000 yen - 22,387 yen = 7,613 yen
is all the principal that decreases.
Of course,
the principal repayment portion will increase little by little.
However,
even if you make no additional borrowings midway,
and continue only with repayments,
・Approximately 93 payments until full repayment
・Duration approximately 7 years and 9 months
・Total repayment amount approximately 2.78 million yen
・Total interest approximately 1.29 million yen
will be the result.
Borrow 1.5 million yen, and
about 1.3 million yen is just interest.
This is the reality of card loans.
Moreover,
card loans have
"the credit limit is restored when you make a repayment"
as a feature.
Repay 7,500 yen
↓
Credit limit opens up by 7,500 yen
↓
Use it again
*The minimum borrowing amount may be 10,000 yen or more in some cases.
If you repeat this,
the principal will hardly decrease.
I have
dealt with many debtors who hit a wall with repayments
at a bank-affiliated card loan guarantee company.
Of course,
it is also a fact that
some people have been savedthanks to card loans.
Illness
Unemployment
Nursing care
MovingSudden expenses
In life,
there are situations where
"you need cash right now."
On the other hand,
if you use them without understanding the repayment structure itself,
there is a possibility that it will continue to put pressure on your life
for a long period.
In card loan advertisements,
the phrase
"Please use responsibly."
is often used.
However,
in the field,
I have seen many people who "could no longer repay responsibly."
That is precisely why,
what you should think about before borrowing
is not just "how much can I repay each month,"
but also
"when can I pay it off in full?"
I believe.
*Interest rates and repayment terms vary by product.
*This article is an example of a general repayment structure.
This is a related article.