The interest rate of small loan companies is influenced by market environment, loan term, borrower's credit status and other factors. Generally speaking, the interest rate of microfinance companies will be higher than that of bank loans, because microfinance companies need to bear higher risks.
The interest rate calculation formula of microfinance companies is simple:
Interest = principal x annual interest rate x loan term (year)
For example, if you borrow 10000 yuan from a small loan company, the annual interest rate is 10%, and the loan term is 1 year, then the interest you need to pay is:
1 ten thousand yuan x 10%x 1 year = 1 ten thousand yuan.
It should be noted that microfinance companies may charge extra fees, such as handling fees and management fees. These costs need to be considered when calculating the real interest rate.
In addition, the interest rates of different microfinance companies may be different. It is suggested to compare before borrowing and choose a company with lower interest rate and better reputation. When borrowing money, you should also read the loan contract carefully to understand the loan amount, interest rate, repayment period and other detailed information to prevent potential risks.