# How it Works

#### So how does it work? It’s easy.

The annual interest rate is 28.8% (2.4% per month) calculated and compounded monthly from the date of advance until the date of payment in full, together with interest on unpaid interest at the same rate and on the same terms. This results in an effective rate of 32.923% per annum.

TOTAL INTEREST COST ON A \$12,000 LOAN VS \$1,000/MONTH. Option 1 – Lump Sum Loan Program (Dark blue line in graph above)

Example: You receive a lump sum loan of \$12,000. After the first year has passed, your interest cost will be \$3,950.74. Meaning, after the first year you will owe a total of \$15,950.74.

Option 2 – Monthly Loan Program (Light blue line in graph above)

Example: You receive a monthly loan of \$1,000 per month for a period of 12 months. After the first year has passed, your interest cost will be \$2,047.06. Meaning, after the first year you will owe a total of \$14,047.06.

Choosing Option 2 will result in a savings of \$1,903.67, or a 48% reduction, in interest costs.