Net rate of return refers to the actual income generated by the loan, that is, the profit after deducting all expenses. You can usually use the following formula to calculate the net rate of return:

Net rate of return = (interest income-expenses)/loan principal

Among them, interest income refers to the interest income obtained during the loan period, and the expenses include handling fees, interest management fees and liquidated damages. The loan principal refers to the initial loan amount of the loan.

Calculating the net rate of return can help you evaluate the actual income of the loan and provide reference for decision-making. However, it should be noted that the net rate of return can not measure the risks and benefits of loans alone, but also consider the loan term, market interest rate, repayment ability and other factors.