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ISSN 2067-3310, E-ISSN 2067-7669 

Vol. 19, No. 1 (2025), pp. 399-404 

 

399 
 

TIME VALUE OF MONEY IN THE LITHUANIAN CREDIT 

MARKET: A PRACTICAL ANALYSIS OF CONSUMER LOAN OFFERS 

 

M. PRYŠMANTAITĖ, A. MARKAUSKAS, J. KARTAŠOVA 

 

Mantė Pryšmantaitė¹, Astijus Markauskas², Jekaterina Kartašova3 

¹ ² ³ Business School of Vilnius University, Lithuania 

¹ E-mail: mante.prysmantaite@vm.stud.vu.lt  

² E-mail: astijus.markauskas@vm.stud.vu.lt  
3 https://orcid.org/0000-0003-3774-1817, E-mail: jekaterina.kartasova@vm.vu.lt   
 

Abstract: This report uses the Time Value of Money (TVM) framework to evaluate and 

compare consumer loan offers from three Lithuanian credit providers: Inbank, Artea, and Saldo 

Bank. Focusing on a loan amount of €5000, the study examines repayment terms of 12, 24, and 

36 months, each with different interest rates and administrative fees. By calculating key 

financial indicators such as monthly payments (PMT), total repayment, total interest paid, and 

present value (PV), the analysis identifies differences in the actual cost of borrowing. The 

results show that Inbank offers the most financially favorable terms overall, yet borrowers may 

still choose more expensive options based on short-term affordability. These findings 

emphasize the value of using TVM principles in personal finance and highlight the importance 

of transparent loan structures in helping consumers make informed financial decisions in the 

Lithuanian credit market. 

Keywords: TVM, consumer loans, Lithuanian credit market, personal finance 

 

1. INTRODUCTION 

In the recent decade, borrowing has become increasingly popular in Lithuania, 

explained by rising consumer demand and easy credit access through banks and non-bank 

lenders (Kanapickienė et al., 2022). According to publicly accessible data on 

TheGlobalEconomy website, total consumer credit in Lithuania has been recorded at 2.79 

billion Euros in March 2025, with a clear positive trend. Lithuania has numerous credit 

companies offering varying interest rates, fees, and repayment terms. This environment of high 

lender variety and complex loan structures places importance on reliable evaluation methods. 

Consumers may be drawn to attractive monthly payments or promotional interest rates without 

fully understanding how additional fees or longer repayment periods affect the real cost of 

borrowing (Johnson, 2022). To address this problem, applying the Time Value of Money 

(TVM) concept may become instrumental. TVM allows individuals to assess the real value of 

future loan payments in today's terms, which enables them to compare offers by their full 

financial impact over time, not only surface rates (Kahn & Baum, 2019). 

As borrowing becomes more embedded in everyday financial behavior, the ability to 

interpret complex loan structures can influence not only individual financial well-being but 

also broader economic stability (Lin & Bates, 2022). Additionally, financially informed 

consumers are less likely to become overindebted and are better equipped to make optimized 

borrowing decisions (Lusardi, 2019). 

The purpose of this report is to apply the principles of the Time Value of Money (TVM) 

to evaluate and compare three consumer loan offers from Lithuanian credit providers - Inbank, 

Artea, and Saldo Bank. By analyzing loans of equal amounts (€5000) across varying repayment 

terms, the study aims to determine how differences in interest fees, administrative fees, and 

loan durations affect the total cost of borrowing. Through this assessment, the report seeks to 

mailto:mante.prysmantaite@vm.stud.vu.lt
mailto:astijus.markauskas@vm.stud.vu.lt
mailto:jekaterina.kartasova@vm.vu.lt


TIME VALUE OF MONEY IN THE LITHUANIAN CREDIT MARKET: A 

PRACTICAL ANALYSIS OF CONSUMER LOAN OFFERS 

 

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identify the most financially efficient loan offer and to demonstrate how the concept of TVM  

can serve as a tool for consumers to make informed borrowing decisions. 

 

2. Literature analysis 

The concept of the Time Value of Money (TVM) is a foundational principle in finance, 

which claims that a monetary unit in the present time is worth more than the same unit received 

in the future. The principle explains the potential of current funds earning returns over time, 

which is a central notion in financial decision-making (Fabozzi, 2021). In finance, the TVM is 

used not only as a theoretical foundation but also as a practical tool to evaluate loans, 

investments, and annuities - understanding TVM is necessary to accurately determine the value 

of financial assets with cash flows (Brigham & Ehrhardt, 2017).  

Similarly, Ross, Westerfield, and Jordan (2003) present the TVM as a framework 

through which all future cash flows are evaluated, mainly in the context of investment appraisal 

and capital budgeting. The authors emphasize that without appropriate discounting of future 

values, financial analysis becomes flawed. To reinforce this perspective, Gitman and Zutter 

(2015) describe TVM as a foundation to financial rationality, a tool that allows decision-makers 

to track the trade-off between immediate consumption and deferred investment. 

The quantitative foundation of TVM comprises several key formulas that enable the 

valuation of cash flows occurring at different points in time. Present Value (PV) reflects the 

current worth of money that will be paid or received in the future. The calculation of PV 

involves discounting the future cash flows back to today’s terms by accounting for the 

opportunity cost of capital or interest rate (Brealey et al., 2000). Future Value (FV) represents 

the amount an initial investment will grow to at a specified point in the future, assuming it 

earns interest or returns over time. It captures the compounding effect, where interest is earned 

not only on the original principal but also on accumulated interest from prior periods (Gitman 

& Zutter, 2006). Payment (PMT) explains the regular, fixed amount of money paid or received 

in each period of a financial agreement, such as a loan or an annuity. It is calculated based on 

the loan amount or investment principal, the interest rate per period, and the total number of 

payment periods (Bracker & Lin, 2018). Interest rate is used to discount or grow money over 

time. It represents the cost of borrowing or the return on investment, and is expressed as an 

annual percentage, though in most cases it needs to be adjusted to match the frequency of the 

payment (monthly, quarterly, etc.) (Westerfield et. al., 2019). As for Total Repayment and Total 

Interest Paid, the former is the sum of all payments made over the entire term of a loan or 

investment, representing the full amount returned by the borrower to the lender, and the latter 

indicates how much additional money is paid over the original amount borrowed or invested, 

due to interest accumulation (Mishkin & Eakins, 2018). 

The concept of TVM is implemented in structuring loan repayment schedules. Once a 

borrower takes out a loan, the lender will use TVM principles to calculate the fixed periodic 

payments needed to fully repay the loan over time, factoring in the interest rate and the number 

of payment periods, which ensures that the lender recovers both the interest and the principal 

(Dahlquist & Knight, 2022). Borrowers are often faced with multiple loan options with 

differing interest rates, fees, and payment terms. Applying TVM principles allows them to 

differentiate between lenders by calculating the present value or effective cost of each loan, 

revealing which loan is truly less expensive when accounting for timing and size of payments 

(Gould, 2021). 

 

3. Study Sample 

Three consumer credit companies – Inbank, Artea, and Saldo Bank – were selected for 

their active presence in the Lithuanian lending market and diverse consumer loan offerings. On 



Mantė PRYŠMANTAITĖ, Astijus MARKAUSKAS, Jekaterina KARTAŠOVA 

401 
 

each of their websites, an amount of 5000 EUR was chosen and found their annual interest 

rates respectively: 7.90%, 9.90%, 12%. Although this paper analyses three different repayment 

periods (36 months, 24 months, 12 months) for the same three companies, the annual interest 

rate did not change for all three terms. Additionally, all three companies have administration 

fees: Inbank – monthly 0.29% of the borrowed amount; Artea – monthly 0.25% of the borrowed 

amount; Saldo Bank – 8,95 € / month. 

 

4. Methodology 

This analysis applies Time Value of Money (TVM) principles to evaluate and compare 

three consumer loan offers from Inbank, Artea, and Saldo Bank. All three companies were 

analyzed assuming an identical loan amount of 5000 EUR, with varying repayment terms 

(36,24, and 12 months) and their fixed annual interest rates. The goal was to assess how loan 

structure affects total repayment cost and the financial burden on the borrower over time. 

To conduct the comparison, the following financial indicators were calculated: 

Periodic Payment Amount (PMT) 

The amount the borrower must pay each month to repay the loan. Calculated using the 

standard formula: 

𝑃𝑀𝑇 = 𝑃𝑉 × 
𝑟(1 + 𝑟)𝑛

(1 + 𝑟)𝑛 − 1
 

PV – present value 

r – monthly interest rate 

n – number of periods 

Real PMT 

Most credit companies have administration fees that are added each month to the PMT 

and influence the total repayment amount. Calculated by simply adding: 

𝑅𝑒𝑎𝑙 𝑃𝑀𝑇 = 𝑃𝑀𝑇 + 𝑓𝑒𝑒𝑠 

Fees – monthly administration fees found on each company’s website 

Total Repayment 

The total amount repaid over the life of the loan. In this study, real PMT is used because 

of the monthly fees. Calculated: 

𝑇𝑅 = 𝑟𝑒𝑎𝑙 𝑃𝑀𝑇 × 𝑛 

Total Interest 

The total cost of borrowing. Calculated: 

𝑇𝐼 = 𝑇𝑅 − 𝑃𝑉 

Present Value 

Used to confirm that the value of all three loan offers, when discounted at different 

rates, results in the same financial value at the time of borrowing. This analysis does not include 

external costs. PV is also used to illustrate how future payments are valued today using: 

𝑃𝑉 = 𝑃𝑀𝑇 ×  
1 − (1 + 𝑟)−𝑛

𝑟
 

By calculating and comparing these values, the analysis demonstrates how the loan 

term affects the total cost to the borrower when the present value is constant but interest rates 

are different. All calculations were performed manually and cross-verified using a financial 

calculator and Excel. 

 



TIME VALUE OF MONEY IN THE LITHUANIAN CREDIT MARKET: A 

PRACTICAL ANALYSIS OF CONSUMER LOAN OFFERS 

 

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5. Results 

Monthly Payment (PMT) and Administration Fees 

The tables present the monthly payment amounts (PMT) and the monthly payment, 

including administrative fees for a €5000 loan over 36, 24, and 12-month terms from Inbank, 

Artea, and Saldo Bank. 

 

Table 1. PMT and Real PMT of a 36-month repayment term 

Term Company PMT (€) PMT incl. admin (€) 

36 months Inbank 156.45 170.95 

36 months Artea 161.1 173.6 

36 months Saldo bank 166.07 175.02 

 

Table 2. PMT and Real PMT of a 24-month repayment term 

Term Company PMT (€) PMT incl. admin (€) 

24 months Inbank 225.91 240.41 

24 months Artea 230.49 242.99 

24 months Saldo bank 235.37 244.32 

 

Table 3. PMT and Real PMT of a 12-month repayment term 

Term Company PMT (€) PMT incl. admin (€) 

12 months Inbank 434.71 449.21 

12 months Artea 439.35 451.85 

12 months Saldo bank 444.24 453.19 

 

Data shows a consistent pattern throughout all three loan terms (12, 24, and 36 months): 

Saldo Bank offers the highest base monthly payments (PMT) due to its higher interest rate, 

while Inbank generally has the lowest PMT. However, when administrative fees are included, 

the total monthly cost differences narrow, and in some cases, the company with the lowest 

interest rate does not offer the lowest total monthly burden. 

 

Total Repayment and Interest Paid 

 

Table 4. Total Repayment and Total Interest Paid of a 36-month repayment term 

Term Company Total Repayment (€) Total Interest Paid (€) 

36 months Inbank 6154.25 1154.25 

36 months Artea 6249.65 1249.65 

36 months Saldo bank 6300.78 1300.78 

 

Table 5. Total Repayment and Total Interest Paid of a 24-month repayment term 

Term Company Total Repayment (€) Total Interest Paid (€) 

24 months Inbank 5769.80 769.80 

24 months Artea 5831.85 831.85 

24 months Saldo bank 5863.62 863.62 

 

Table 6. Total Repayment and Total Interest Paid of a 12-month repayment term 

Term Company Total Repayment (€) Total Interest Paid (€) 

12 months Inbank 5390.53 390.53 

12 months Artea 5422.16 422.16 

12 months Saldo bank 5438.33 438.33 

 



Mantė PRYŠMANTAITĖ, Astijus MARKAUSKAS, Jekaterina KARTAŠOVA 

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The tables show that while all three companies offer the same amount of €5000, the 

total repayment and interest paid increase with both the loan term and the interest rate. Saldo 

Bank consistently has the highest total cost, while Inbank offers the most cost-effective option 

across all terms. Shorter terms significantly reduce the total interest paid, demonstrating that 

borrowers who can afford higher monthly payments benefit from lower overall loan costs. 
 

6. Discussions and Recommendations 

6.1 Financial Evaluation Using Time Value of Money 

Based on the Time Value of Money (TVM) calculations, Inbank is the most financially 

favorable option across all repayment periods. Despite having slightly higher administrative 

fees than its competitors, Inbank consistently offers the lowest base monthly payment (PMT) 

and lowest total interest paid, which directly translates to a lower total cost of borrowing when 

measured in present value terms. Since all three loans have an equal present value, the 

differences in total repayment are solely influenced by interest rates, repayment terms, and 

administrative fees. This confirms the central TVM insight that the longer and more expensive 

the repayment schedule, the greater the overall costs. 

Saldo Bank, in contrast, offers the least favorable loan terms, with the highest interest 

rate (12%), leading to the highest PMTs and total repayment values. Artea falls between the 

two but remains closer to Saldo Bank in overall cost than to Inbank. 
 

6.2 Likely Consumer Behavior 

From a behavioral standpoint, typical consumers may prioritize monthly affordability 

over total cost. In this case, Saldo Bank’s longer-term loans with lower apparent administrative 

fees may seem attractive, despite being more expensive in the long run. Borrowers focusing on 

short-term financial comfort might choose a 36-month option, where monthly payments are 

more manageable, even though it leads to higher cumulative interest paid. Thus, while Inbank 

is financially optimal using TVM, a typical borrower might still choose a less cost-effective 

option due to cash flow constraints or a lack of awareness about the real cost of borrowing. 
 

6.3 Limitations of the Analysis 

This study is based on clear, objective TVM metrics, but it does have several 

limitations. Subjective weights were not assigned to factors such as risk tolerance, income 

stability, or borrower preferences. The analysis does not account for penalties, early repayment 

conditions, or promotional offers, which may affect the real cost It assumes borrowers are fully 

rational, while consumer behavior is often influenced by emotions, financial literacy, or 

marketing tactics. Monthly administrative fees were treated as fixed, though in practice, they 

may vary based on conditions not publicly disclosed. 
 

6.4 Recommendations 

For borrowers: If financial flexibility allows, choosing shorter-term loans — especially 

from Inbank — results in lower overall borrowing costs. Borrowers should not focus solely on 

monthly payments but should also compare total repayment amounts and interest paid. 

For lenders: Transparency about total cost, including fees, can build trust. Providing 

visual comparisons or TVM-based breakdowns may improve financial literacy and client 

satisfaction. 

For future research: Including qualitative assessments, borrower profiles, or 

simulations with varying income levels would provide a more comprehensive picture of 

borrowing decisions. 



TIME VALUE OF MONEY IN THE LITHUANIAN CREDIT MARKET: A 

PRACTICAL ANALYSIS OF CONSUMER LOAN OFFERS 

 

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7. CONCLUSIONS 

This report applied the Time Value of Money (TVM) framework to compare three 

consumer credit offers from Inbank, Artea, and Saldo Bank. Although each company offered 

the same loan amount (€5000), differences in interest rates, repayment terms, and 

administrative fees significantly influenced the total cost of borrowing. The analysis showed 

that Inbank consistently provided the most cost-effective option, while Saldo Bank was the 

most expensive, particularly over longer terms. 

The findings confirm that both the length of the loan and the interest rate are critical in 

determining a loan’s true financial impact. While borrowers often prioritize low monthly 

payments, this study highlights the importance of considering total repayment and interest paid 

over time. By using TVM principles, borrowers can make more informed financial decisions 

and better evaluate the real cost of credit. 

 

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