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Education Finance

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Loan Amount : 500- 4,000 JD

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Grace Period : Not applicable

Payment Date

Payment Date : 1st of each month

Loan Term

Loan Term : 3 - 12 Months (according to loan amount)

One-time commission for credit granting

One-time commission for credit granting : 1% of granting credit for the loans less than 1,000 JOD, and 1%+10 JOD of granting credit for the loans amount between 1,000-10,000 JOD

Late payment commission

Late payment commission : 0.25JOD/day for monthly payment less than 50 JOD, 0.5JOD\day for monthly payment between 50-200 JOD, 1JOD\day for monthly payment between 200-400 JOD

Annual interest rate

Annual interest rate:

In collaboration with partners suppliers: 0%

Other Suppliers: declining interest rate/annual of 16.468% which is equivalent to fixed interest rate/annual of 9% For

- Declining interest rate is indicative; the rate depends on the tenor of the loan.

Loan Purposes

Loan Purposes : Educational financing to cover educational expenses or educational supplies, such as devices and equipment

Insurance Solutions

Insurance Solutions : Customers' lives are insured through Sanad or Aman- based on the customer's request - according to the financing ceiling and in line with the terms and conditions of the services provided.

* 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.

*The company is an insurance agent for the Jordanian Insurance Company and its registration number with the Central Bank of Jordan is 0022/01/5/20.

*To obtain this finance, please prove that the student belongs to a school, university or institute.

A client received a JOD 1,000 loan from Tamweelcom, from one of the approved suppliers for with a tenor of 12 months and at a declining interest rate/annual of 0% which is equivalent to fixed interest rate/annual of 0%.

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

Total interest rate for the loan = 0 JOD

Stamps duty on the Contract = 2 JOD

One-time commission for credit granting =20 JOD

Other services: “Sanad” insurance service upon customer request, subject to the company’s terms and conditions = 2.5 JOD per month

2- What is the monthly payment for the loan (principal, interest and sales tax on interest)?

First month payment amount: 89.500 JOD (Principal 125 JOD, interest 0 JOD and sales tax on interest 0 JOD)

The remaining monthly payments amount: 85.500 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 = 1.866

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) = : 10.682%

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