Posted on: 04th Jun, 2011 09:52 am
If a loan is a fixed rate loan , can compound interest apply to it if how and why ?
Compound interest is a concept solely reserved for bank accounts (savings, etc.) and has naught to do with mortgage lending.
Of course, with savings accounts paying next to nothing to begin with, I don't know if we can say that compound interest has any relevance to our lives at all, anyway.
Of course, with savings accounts paying next to nothing to begin with, I don't know if we can say that compound interest has any relevance to our lives at all, anyway.
Hi Lilly!
Welcome to forums!
I guess you should contact your lender and he will be able to let you know whether or not compound interest will apply on a fixed rate loan. But as George has mentioned in his posts, they don't apply in case of mortgages.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
I guess you should contact your lender and he will be able to let you know whether or not compound interest will apply on a fixed rate loan. But as George has mentioned in his posts, they don't apply in case of mortgages.
Feel free to ask if you've further queries.
Sussane
Again, though, since compound interest is irrelevant to lending, there's no need whatsoever to contact your lender. Please don't - in all likelihood, the person you speak with won't have ever worked on the banking (savings, checking) side of the banking world and won't even have a clue as to what you're referring.