I was trying to do some maths in excel, I was able to calculate the amount I will be paying for a 40000USD loan at a 13.9% (7 years) based on amortised scheduled repayments with a constant interest rate for the term of the loan.

Someone I know will be able to lend me money every month 1000USD at 6%. if I accept this loan 2 and repay all the amount to loan 1 747USD (my own money) + 1000USD (lend from loan 2). it will be good for me? I will start paying the loan 2 as soon as I finished paying loan 1 with 747USD payments per month.

  • "lend me money every month 1000USD at 6%." For how many months will he loan you the money, and when will he expect you to pay it back? – RonJohn Jan 31 at 8:33
  • How can we know if it is good for you? – Pete B. Jan 31 at 11:23

If I see it right, the $747 comes from the expectation of loan 1 to be finished in 7 years. In this time, you'll have paid about $22800 in interest.

If, however, you are able to pay $1747 per month, this loan 1 will be finished in 2022 (about) and will cost $6750 in interest.

Adding to this, you will have loan 2, whose principal increases from month to month. At the same time you will be finished with loan 1, you will have accrued a princial of $28830. The interest accrued up to then is included in that; maybe you want to calculate that in a different way. It will be an amount of about $1830.

Then, you start paying back your loan 2. Depending on how fast you want to have it gone and how much you can pay per month, it will cost more or less. Let's take a monthly rate of $750, then you will be finished in 41 months and pay an interest of about $3000.

So in total, this variant will cost you $6750 + $1830 + $3000 = $11580 in interest instead of $22800.

Whether the source of this loan 2 is really someone you should have a loan with is up to you. (Remember that financial stuff can quickly ruin friendships!)

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