Topics › Loan with Discount – Effective Rate
Loan with Discount – Effective Rate
Converts a loan with a discount (disbursement below 100 %) into the comparable effective rate.
Enter your own numbers and press "Calculate" – or load an example on the right; "Type in" replays it on the device.
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What you learn
A discount makes a loan look cheaper (lower nominal rate) but shifts the cost into the disbursement deduction. Only the effective rate makes offers honestly comparable.
Formula
Internal rate from actual disbursement, installments and remaining debt
How the formula works
With a discount less is disbursed than you owe – a prepaid interest. The calculator takes the actual disbursement as the present value and finds the rate that fits the installments and remaining debt. This is how the effective rate exposes the seemingly low nominal rate.
Cash-flow IRR with the real disbursement as the present value.
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iframe code›
<iframe src="https://fintechcalc.mindcruce.com/calculator.php?c=disagio-effektivzins&embed=1" width="100%" height="640" style="border:1px solid #ddd;border-radius:12px" loading="lazy"></iframe>