This guide is split in a small part for all newcomers that want to understand fast and a second bigger part for those that want the details.


EASY TO UNDERSTAND SMALL PART

Step 1: Get 1,000,000 loan from a banker for about 20% or less interest.
Step 2: Spend about 875,000 at the CREDITS EXCHANGE and BUY 7 credits.
Step 3: With the 7 credits, buy 5 LMM at the SHIPS Market
Step 4: With the remaining 125k buy 5 captains, 1 admiral and 1 merchant.
Step 5: Put all 5 LMM in a single fleet and hire crew.
Step 6: Setup a trade route at Tortuga-Tzogos for this fleet.
Step 7: Use the income generated from this fleet (About 28.8k) to pay off the loan.


Repeat



FULL GUIDE



Why should you read my guide?

At this moment, I should still be among the largest loan receivers in the game.
Here are my stats, most were recorded a long time ago:

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Loans Overview
Total Loans signed:    73
Total Gold Coins Received:     1,534,500,000
Total Gold Coins paid back:     1,619,010,447

All these contracts, have filled me with experience on how to take advantage of this particular feature of the game. An experience that part of it I will share today.

Like we tell to every newcomer in HELM, loans are the way to go at your first days here.

Why?
There are several factors that can make you advance faster. Believe it or not, with gold coins you can nowadays buy everything. You can exchange them for credits and even get voodoo cards. Here are some ways to spend your gold coins early on:

-Upgrade ships (to beat other players at the plunder screen and pay for your loans - perhaps the best way to spend)
-Hire Captains (These quickly become expensive to buy without support)
-Buy Ships (simply, exchange your gold for credits then use them at the ships market)
-Buy cards (Again, exchange your gold for credits - you should especially look for cards like Iron Golem, Coastal Piracy, Pacifism)
-Buy turns (Again with credits exchange although at this point, you should better buy ships right away but you can never have the same plan as everyone else - if you need turns to rob that fat merchant fleet that you just spotted at the plunder page, then why not?)


Uhmm.. Loans? Not for me please.

Really now? I have took so many loans that I would never dare to take IRL. This is a game guys and gals. Things are much easier here, believe me.
See this safe example. I will use current rates but safe rates.

We are going to take a loan to get 5 new ships. 5 LMM. These, currently sell for 1 to 2 credits. For a safe rate, we will assume for 5 ships, you will need 7 credits (3 for 1 each and 2 for 2 each).

Credits now cost 125k to 135k. We will assume a safe rate of 130k. So, for 7 credits, you need 910k. Let's say 1M as you will also need to buy some captains (use the officers calculator for exact price here - my example is for newcomers. You will need more than 1M if you have more than 15 captains already) and crew.

The loan offer

All you need to do, is to go to Market -> Banks of Avonmora -> Request Loan Offers and ask for 1 million.

The problem is that you are new and no one trusts you. So, the loan offers you will receive, will all be high in interest. A highway robbery one would say. Is it though?

Let's assume that a bank decides to help and send you 1M gc , for 20% interest, 30% compound, daily payments at 90 days.

First, let me explain what this means:
-You will get 1M gold coins upon loan acceptance.
-Then, you will get to pay for it 20% (per year) + Loan Tax of the Banker (commonly 1%) + 0.3% corruption fee (nation tax and corruption fee is a fixed fee paid by the banker on day 1, it has no interest added on)
-Interest is calculated daily on REMAINING capital.
-Compound replaces interest if you fail to make a payment on time (not added on top of it)
-You will have 90 days to pay back initial capital plus fees.
-The total daily installment is 14,901

Wwwhat?

Confused? No need. All you need to know is the TOTAL DAILY INSTALLMENT. It's 14,901 and it includes EVERYTHING.

How to judge the offer

1)Compare it with other offers. That's the best you can do.Here are things to consider:
-The more installments, the better as you chew off the whole capital faster.
-The longer time the better as it keeps the installment low. You can still repay anytime you wish.
-Obviously, the lower the interest the better. Remember to include the nation tax in it.

2)Compare it with returns
You should be able to at least pay the extra interest with the way you will use the money. If this is met,then you can accept the offer.


Income Versus Expense

This is the most important part. Let's go back to our example:

1)We took a 1M loan with an interest rate of 20% + 1.3% fixed fee on capital issued.
2)This resulted to a daily installment of 14,901 for 90 days.

90 * 14,901 = 1,341,090 is the total amount we will follow the exact installment every day for 90 days.

That's a total of 341,090 EXTRA GOLD COINS from the amount we receive.

3)BUSINESS PLAN
With the 1M we get, we go to the credits exchange and we buy 7 credits. With the 7 credits, we buy 7 LMM.
With the remaining gold, we buy 5 captains,1 admiral and 1 merchant. We also crew up the fleet.

We use this tool to find a profitable route: https://khanstan.github.io/pg3/
For this example, we will pick the classic route. We will send the fleet to trade at Tortuga-Tzogos. The fleet will generate a profit of 28.8k per day.

4)RESULT
At 90 days, the fleet will generate a total of 2.52M

Our cost for this is 341k.
That's a profit of 2.17 Millions.

OUT OF THIN AIR

You are a newcomer - risk is very low for your trade fleet. Go for it!

Shortly after this guide I received surprisingly many PMs. Let me add a few more things that should be useful as it seems to many:

1.Explaining the Loans Mechanism

The initial Capital: 10 Million
The initial interest: That's calculated off the initial capital for a period of 7 first days. That's the minimum profit for the banker!

After the 7 days though, the interest is recalculated daily, on the REMAINING CAPITAL.

This is perhaps a GREAT detail that MANY might miss.

EXAMPLE

Let's suppose that I have taken a loan of 20M. After 2 months, I still have 15M to pay and let's say I pay 40k a day. But today I have some extra cash in hand so I decide to pay up a bigger amount. So, this time, I pay 5M!

Tomorrow, the installment will be 26,737
Since the capital dropped, the interest included here will also be smaller!

RULE OF THE THUMB
The faster you pay up a loan, the less the expenses.

EXAMPLE ABOVE
Let's go to the example above. If the player above pays the whole profit from the fleet as an installment, instead of the standard installment, he will repay the loan about 50 days earlier. At this case,if my calculations are correct, the TOTAL COST will be 142k instead of 342K. While income will be the same.

Should you always repay fast?
The answer is definitely no. At most cases, like I said above, you want to pay a lot later. This is in favor of both the client and the bank as the bank will make more in this way. But when you are on the build up phase, you probably need every single gold coin. So paying faster will halt up your own funding of your development.

Improving your profile

When you are in need of loans, you must keep in mind that the loan is coming from another -REAL- player. You need to come to his place. At that moment, he is giving you his own gold with no real way of getting them back if you decide to scam him.

Do you really want to do this though? The answer is surely no as reputation here is very important. No one will really trust you anywhere is you make deals you do not honor and a loan is a deal.

You should always look to improve your profile. Communication with the banker is important. Building a relationship with the banker is important. You both earn from this so there are things to discuss. Plus, bankers are usually experienced players so they will surely have some good advice for you once you seek it.

Paying on time is important. If you ever take a loan and go inactive, remember to login back to pay the loan back. Even if the game is over for you it is not over for the banker.

Slowly but steady, as you keep paying your loans and taking more, the new loans will naturally have better percentages. You should even ask for them.

Approaching bankers of your nation is a good move. Avoid dealing with possible enemies of your nation or guild (for reasons that do not fit here to explain).

Awesome guide B.S.! I used loans hard and heavy in my early days (I am still a noob) and it helped me to position myself very well in a very short period of time.

Thanks for another awesome guide. This guide shows exactly how a newcomer can get strong in a short period of time. I must admit at first i was scared than loans. Because even irl im against any kind of loans and not using master cards. It feels too risky to me. But when i started to make calculations i realized sky is the limit for loans.

Always take loans invest them pay what you take and start same process from the beginning. Paying your loans in regular order also increase your reputation between bankers. And they willing to issue you more loans with lower interest rates. Also dont forget to you can get nice amount of stipends from big nations. Thanks to Spain i paid my loans with stipends at first. it helps a lot to grow even faster.

But as a loan addict i want to recommend a few things who willing to take loans. Always calculate your income and daily outcome. And try to not pay for loans more than 20% of your daily income. Its your decision you can go for more but it will drive you out of game or you will simply stop to paying your loans which will be even worst. My advice dont put yourself in a tough situation that way you can easily control your loans' payments.


Sincerely Mugiwara...

Added up one more post.

Risk is nice here. I mean, we usually do not take risks in life. Why do the same here? Not only in loans! Take a ship and plunder! (ATTENTION: Pick your target well - risk is one thing, suicide is another).

I am catching up to you Sparrow... But I don't know if this is good or bad.

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Loans Overview
Total Loans signed:   31
Total Gold Coins Received:    745,350,000
Total Gold Coins paid back:    748,451,490

Shadowood wrote:I am catching up to you Sparrow... But I don't know if this is good or bad.

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Loans Overview
Total Loans signed:   31
Total Gold Coins Received:    745,350,000
Total Gold Coins paid back:    748,451,490

Not bad

i didn't take very many loans early on but recently i've been grabbing quite a number of them

Total Loans signed: 19
Total Gold Coins Received: 164,000,000
Total Gold Coins paid back: 115,908,963

im doing decent and with how im running i'll probably end up with quite a bit more then that.

ive issued more loans from my bank then ive gotten from others so it seems like im doing pretty decent in both the income and outgoing funds.

Great guide BS and very useful, not only for newcomers, but for all of us, who are new in the business, too!