* Clients are applicaple for Tawasol loan (Additional Supporting loan for existing clients) as per the following :

     - Minimum Loan Amount: 100 JOD for each member

     - Maximum Loan Amount: 25% of the Basic loan amount and maximum 500 JOD for each member

     - Fixed monthly interest Rate: 2%

     - Loan Term: 6-12 Months

* All kind of loans are subject to Stamps Fees Law and Sales Tax Law.

* Includes all persons as long as they are in full legal capacity and in line with the company’s policy and provisions.

* The company is obliged to grant funding only for legal purposes, and the fund is not granted for any kind of illegal purposes or purposes that entail environmental and social impact.

* Terms and conditions apply.

A group of 3 women, one of them is renewed for the third time, the group is received a JOD1,500 loan from Tamweelcom, the share of each member being JOD 500, with a tenor of 15 months and at a declining interest rate/annual of 31.8% which is equivalent to fixed interest rate/annual of 18%.

1. What is the total interest rate paid for the loan?

Total interest rate for group = 337.5 JOD

Total interest rate per group member = 112.5 JOD

Stamps duty on the Contract = 6 JOD

Fees= 2 JOD

One-time commission for credit granting = 15 JOD

2. What is the monthly payment for the loan (principal, interest and Sales tax on Interest)?

First month payment amount for group: 125.625 JOD (Principal 84.672 JOD, interest 39.762 JOD and sales tax on interest 1.191 JOD).

First month payment amount per group member: 125.625÷ 3= 41.875 JOD (Principal 28.224 JOD, interest 13.254 JOD and sales tax on interest 0.397 JOD)

The remaining monthly payments amount for group: 123 JOD (including principal payment, Interest and Sales tax on interest)

 The remaining monthly payments amount per group member: 123÷ 3= 41 JOD (including principal payment, Interest and Sales tax on interest).

3. How to calculate the effective interest rate (EIR) for the loan

The effective interest rate (EIR) = (1+IRR)¹² - 1

The Internal rate of return (IRR) calculated using Microsoft Excel by using the equation of IRR

Value field: enter all the cash flows (plus and minus)

Guess field: (represent the expected income) enter 0

IRR = 0.02943

Which represent the Monthly Effective rate

The effective interest rate (EIR) calculated by substitute the IRR in the following equation:

The effective interest rate (EIR) = (1+IRR)¹² - 1

The effective interest rate (EIR) = 41.63 %