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The Rule of 78 methodology presents added fat to months in the earlier cycle of a bank loan, so a increased part of interest is paid before.
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The Rule of 78 requires the borrower to pay a bigger portion of fascination in the earlier Element of a mortgage cycle, which decreases the possible financial savings to the borrower in shelling out off their loan.
Knowledge the Rule of seventy eight The Rule of seventy eight offers bigger weight to months in the earlier A part of a borrower’s bank loan cycle when calculating curiosity, which enhances the gain for your lender.
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