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However loans have certain risks on both sides of the contract, so it is key to understand how they work for both moneylenders and borrowers.
Let's see the two basic forms of interest first. Since there are offers of both types on #setrade and in shouts/articles, you should first understand the difference between simple and compound interest.
Example One - 100 Golds for 30 days, 2% simple
In this case the moneylender will offer a loan of 100 Golds and will expect 160 Golds back after 30 days.
The principal investment is 100 Golds, 2% of that is 2 Golds, so you simply have to multiply that daily interest by 30 days (2*30=60) and add the result to the principal investment (100+60=160)
Example Two - 100 Golds for 30 days, 2% compound interest
In this case the moneylender will offer a loan of 100 Golds and will expect 181.14 Golds back after 30 days. As you can see, the interest is still 2% a day, but it's compounded daily. That means the principal investment will be increased by 2% every day, and further interest will be calculated on that increased amount.
There will be 2% interest on 100 Golds on the first day, 2% interest on 102 Golds on the second day, 2% interest on 104.04 Golds on the second day, 2% interest on 106.12 Golds on the third one ... and so on.
As you can see, while at a simple rate you'll have to return 160 Golds after 30 days, at a compounded interest you'll have to return 181.14 - as if you had taken a loan at 2.7% simple. Thus, with the same numbers the 2% compound interest equals to 2.7% simple.
You can calculate various rates using free online calculators, like this one . I haven't seen an offer including regular additions yet, though the contract system of the game allows schemes like that. To calculate simple and compound rates simply leave the 'annual additions' 0, and take a game day for a year.
Both Example One and Example Two implies that you take the loan trusting that you'll be able to earn both the principal investment and the interest by the end of the contract.
There might be more complicated loan schemes being offered, like the one you'd get in real life when purchasing a house or something. That involves compound interest, but the loan will have to be repayed in regular installments instead of repaying it at the end of the contract. This way the total amount to be repaid will be significantly lower than in Example Two, however, you'll have to start repaying the loan from the first day of your contract - in daily installments.
Example Three 100 golds for 30 days, compound interest, daily installments
In this case the moneylender will offer a loan of 100 Golds and will expect 102.6 Golds in daily installments for 30 days.
The borrower will have to repay 3.42 Golds every day for 30 days. Since the principal investment is going to decrease day by day, compound interest will be too. While at the first day your principal debt will be 100 golds and 2 Golds interest on top of that, on the day your contract ends you'll have already repayed 99.18 Golds, so you'll own only 3.42 to the moneylender.
This scheme implies that using that 100 Golds you'll be able to turn out a daily income equalling to or over 3.42 Golds.
You can calculate various installment schemes using this free online calculator .
Risks of lending and borrowing
When either lending or borrowing keep the risks in mind.
First, the economic system of Secura is highly unstable. With the Buy Gold Option the influx of Gold - and consequently the balance of the Gold-currency-economy system can not be predicted. A furious Visa-player might emerge out of nothing, buying thousands of Gold and ruining whole countries' economy by either attacking their currency or making irrational moves on their Product and Job Markets.
In Primera, companies founded in medium or no-resource regions/countries hardly ever got upgraded. Owners either abandoned them (and probably the game as well) or they were passed at q1 level to the next newbie silly enough to buy them. On Secura, however, the very first days saw multiple Q5 companies established in the wrong regions - and sucking up manpower from well.placed, but lower quality companies.
To cut it short, what may seem a solid investment today, may turn out to be a loss in a glance. Keep that it mind both when lending or borrowing money. You might find yourself completely broken and trapped in debt - or the same happening to your debtor with your money gone.
Second, note that due to Secura being opened with Primera already on for almost a year, many people joined on day 1 or shortly after. Thus level-up and medal Gold will come in certain waves. Every 30 days expect a lot of Gold coming in from Super Soldier and Hard Worker medals - with the 10% bonus for inviters.
Third, beware of scammers. Moneylenders too eager to earn nice interests on their purchased Gold may find themselves at a loss should the players they've lent to simply abandon their accounts - with their assets having vanished in one of the many ways the mechanics of the game offers. While you can any time report scammers to Game Operators, if the player scamming you did not have the cover for the debt outstanding, you would not be compensated.
You can never be sure of course, but take care and look whom you lend to. Check his or her companies, how well established he/she is in his/her communities, ask for references of loan contracts already fullfilled (well, in this early stage that might not be available yet), and if the borrower claims he/she has liquid assets, ask to present them by offering money/goods on the market at irrational prices so you could see them but the offer won't get called.
Generally, be careful, calculate your risks and try to get informed about other opportunities. Loans can be dangerous - but at the same time, they can be very profitable for both sides of the contract!
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