*The percantage of financing including the intersets from total amount of the cheques Up to a maximum of 80% of the value of the cheques

* Payment Channel is Collection Cheques

* Age of the project should be 12 months and above 

* Targeted Segment is Licensed Micro and Small businesses including Commercial, Industrial, Services.

* 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 15,000 loan from Tamweelcom, with a tenor of 18 months and at a declining interest rate/annual of 20.583 % which is equivalent to fixed interest rate/annual of 11.4%.

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

Total interest rate for the loan = 2565 JOD

Stamps duty on the Contract = 45 JOD

One-time commission for credit granting = 170 JOD

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

First month payment amount: 981.95 JOD (Principal 716.946 JOD, interest 257.295JOD and sales tax on interest 7.709JOD)

The remaining monthly payments amount: 980 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 = 0.01930

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) = 25.783%