*Age of the project should be 12 months and above 

* Targeted Segment is Licensed Micro and Small businesses including Commercial, Industrial, Service, productive Sectors, and vehicles used for business purposes.

* All kind of loans are subject to Stamps Fees Law and Sales Tax Law.

* Includes all persons as long as they are in full legal capacity and in line with the company’s policy and provisions.

* The company is obliged to grant funding only for legal purposes, and the fund is not granted for any kind of illegal purposes or purposes that entail environmental and social impact.

* Terms and conditions apply.

A client received a JOD 8,000 loan from Tamweelcom, with a tenor of 9 months and at a declining interest rate/annual of 21.1% which is equivalent to fixed interest rate/annual of 12%.

 1- What is the total interest rate paid for the loan?

Total interest rate for the loan = 720 JOD

Stamps duty on the Contract = 24 JOD

One-time commission for credit granting = 90 JOD

 2- What is the monthly payment for the loan (principal, interest and sales tax on interest)?

First month payment amount: 973.6 JOD (Principal 828.708 JOD, interest 140.674 JOD and sales tax on interest 4.218 JOD)

The remaining monthly payments amount: 971 JOD (Including principal payment, interest and sales tax on interest).

3- How to calculate the effective interest rate (EIR) for the loan

The effective interest rate (EIR) = (1+IRR)¹² - 1

The Internal rate of return (IRR) calculated using Microsoft Excel by using the equation of IRR:

Value field: enter all the cash flows (plus and minus)

Guess field: (represent the expected income) enter 0

IRR = 0.02112

Which represent the Monthly Effective rate

The effective interest rate (EIR) calculated by substitute the IRR in the following equation:

The effective interest rate (EIR) = (1+IRR)¹² - 1

The effective interest rate (EIR) = 28.501%