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Loan or lease? Different interest calculations
Sunday Island
|March 23, 2025
I had the pleasure of visiting Sri Lanka and during this stay, I rented a room in a family house via Airbnb. I had many conversations with my hosts and during one of them, it emerged that they had taken a loan, or lease as it seemed to be called, which I will outline below, as it seems quite wrong and big fraud and if not that, at least a scam.
Loan sum: 2,000,000 Rps
Interest rate: 16%
Loan period: three years.
The calculation for monthly payments was done like this:
Capital repayments, 2,000,000 divided by the loan period of 36 months, gives 55,555 Rps a month.
The interest was calculated as 2,000,000 times 16% equals 320,000 per year, times three which gave a total interest payment of 960,000. This was then divided by 36 giving a monthly interest payment of 26,666.
This story is from the March 23, 2025 edition of Sunday Island.
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