Illustrative Example on Premium Financing Interest Payment
Item
Amount
Loan Amount
US$144,000
Interest rate1 (Charging at Cost of fund)
5% p.a.
A margin
1% p.a
Loan tenor2
1 Month (Assuming the actual number of days within this month is 30)
Monthly interest payment
US$720 (US$144,000 x 6% p.a. x 30/360)
1Charging at Cost of Funds (“COF”) is subject to re-fixing every loan tenor period , while the margin is fixed. This example is charging at COF plus a margin of 1% p.a. (Assuming COF for this month is 5% p.a. and the margin is 1% p.a.).
Note: For this example, the interest rate on a Premium Financing loan is calculated based on COF plus a margin, where COF will fluctuate and be subject to change from time to time according to market interest rate, and it is not capped.