Primerica SMART Loan vs. conventional loan?

Month 1: $100k x 10% = $10,000 interest

$10k divided by 12 months = $833.33 is 1st month interest

$877.57 - $833.33 = $44.24 goes toward the principal

Month 2: $99,955.76 x 10% = $9,995.576

$9995.576 / 12 = $832.96 is 2nd month interest

$877.57 - $832.96 = $44.61 goes toward the principal

As you can see, it takes a very long time to build equity in your home.

With simple interest calculation (which is used in all loans from Primerica) and you pay every 14 days, this is how the loan work:

Month 1 (day 1 - 14): $100k x 10% = $10,000 interest

$877.57 divided by 2 = $438.79 bi-weekly payment

$10k divided by 365 days = $27.40

$27.40 x 14 days = $383.60 (first 14 day interest)

$438.79 - $383.60 = $55.19 is applied toward principal

Month 1 (day 15-28): $99,944.81 x 10% = $9994.481

$9994.481 / 365 = $27.38

$27.38 x 14 = $383.32 (second 14 day interest)

$438.79 - $383.32 = $55.47 is applied toward principal

Month 1 summary: Your total payment from day 1-28 is $877.58. $766.92 is interest payment and $110.66 is applied toward principal.

Month 1 - 2 (day 29 - 42): $99889.34 x 10% = $9988.934

$9988.934 / 365 = $27.37

$27.37 x 14 = $383.18 (third 14 day interest)

$438.79 - $383.18 = $55.61 is applied toward principal

Month 2 (day 43-56): $99,833.73 x 10% = $9983.373

$9983.373 / 365 = $27.35

$27.35 x 14 = $382.90 (forth 14 day interest)

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