The loan term refers to the effective period of the loan, which is generally calculated on a monthly or annual basis. The loan term is generally not more than one year, and can also be calculated on a quarterly, semi-annual or other time period. There are two main ways to calculate the loan term: one is monthly calculation, that is, each month is calculated according to the actual number of months within the loan term; The other is annual calculation, that is, every year is calculated according to the actual number of years within the loan period.
Interest refers to the remuneration paid by the borrower to the lender during the loan period, and is the fee paid by the borrower to the lender. There are two main ways to calculate interest: one is to calculate interest on schedule, that is, to calculate interest according to the actual number of days in the loan period; The other is to pay interest on a monthly basis, that is, to calculate interest according to the actual number of months within the loan period.
The calculation method of loan interest during the construction period depends on the calculation method of loan term and interest. Generally speaking, the longer the loan term, the higher the interest. On the contrary, the shorter the loan term, the lower the interest. In addition, the calculation method of interest will also affect the level of interest. In general, the interest paid on schedule is higher than the interest paid on a monthly basis. Therefore, when calculating the loan interest during the construction period, the interest level should be determined according to the loan term and interest calculation method.