Why is it said that the prepayment of equal principal and interest is a loss in itself? Isn t the ea

The main repayment interest in the early stage of equal principal and interest prepayment is the interest that accounts for a relatively large proportion, and the principal is mainly in the later stage. In general, the earlier the repayment is made, the less interest.

Of course, if you want to reduce the interest, you can choose to repay in advance, but the bank also has regulations on early repayment, and it is not that the earlier you are, the less interest.

The equal principal and interest repayment method means that the borrower repays the loan principal and interest in equal amounts every month. In this way, the interest expense is the largest in the initial repayment period, and the principal amount is relatively small, and then the principal amount is gradually increased as the monthly interest expense gradually decreases.

The equal principal repayment method means that the borrower repays the loan principal in equal amounts every month, and the interest decreases with the principal month by month, and the monthly repayment amount also decreases month by month.

Extended information: The difference between one word and one word is two completely different repayment methods. That is, the borrower repays the principal and interest of the loan in equal amounts every month, of which the monthly loan interest is calculated based on the remaining loan principal at the beginning of the month and settled month by month.

In the later stage of the loan, due to the continuous reduction of the loan principal and the continuous reduction of the loan interest in the monthly repayment, the monthly repayment of the loan principal is more. This repayment method actually occupies a larger number of bank loans and takes up a longer period of time.

Equal principal repayment method: that is, the borrower repays the loan principal at the same amount (loan amount and number of loan months) every month, and the monthly loan interest is calculated based on the remaining loan principal at the beginning of the month and settled month by month, and the total of the two is the monthly repayment amount.

Calculation formula: monthly principal repayable: a n, monthly interest repayable: an*i 30*dn

Monthly interest payable under the equal principal method = loan balance 12 per annum

Note: A loan principal i loan monthly interest rate n number of loan months.

The remaining principal of the loan in the nth month of an, a1=a, a2=a-a n, a3=a-2*a n....And so on.

The actual number of days in the nth month of DN, such as 28 in February of a normal year, 31 in March, and 30 in April, by analogy, because the monthly principal repayment is fixed, and the monthly loan interest decreases month by month with the decrease of the principal balance, therefore, the equal principal repayment method has a large monthly repayment amount at the beginning of the loan, and then decreases month by month (monthly decrease = monthly principal repayment monthly interest rate).

For example, if you borrow a provident fund loan of 100,000 yuan for 15 years, the monthly repayment amount of the equal repayment method is RMB, while the repayment amount of the first month of the equal principal repayment method is RMB (decreasing every month thereafter), which is higher than the former.

Since the latter repaid part of the loan principal in advance, compared with the former, it actually reduces the occupation and shortens the occupation of the bank's money, of course, the total loan interest is less (the total is yuan in 10 years), and it is not that the borrower gets any additional benefits!

This repayment method is suitable for people whose living burden will become heavier and heavier (pension, medical treatment, children's education, etc.) or whose income is expected to gradually decrease.

In other words, the equal principal and interest repayment method is actually an equal proportional series, and the equal principal repayment method is an equal difference series. It can be seen that the equal principal repayment method is not an option to save interest.

Equal principal and interest repayment method. Encyclopedia.

Equal principal and interest refers to the repayment method of a loan, which refers to the repayment of the same amount of loan amount (including principal and interest) every month during the repayment period. The advantage of equal principal and interest is that the monthly repayment amount is the same, which is convenient for arranging income and expenditure, suitable for economic conditions and does not allow excessive repayment pressure in the early stage, and the borrower whose income is in a more stable state has the disadvantage that he needs to pay more interest, and most of the amount repaid in the previous period is interest. If you have a Ping An Bank loan, you can check the repayment plan through online banking or the Ping An Pocket Bank app, and the repayment plan will show the total amount of remaining repayment interest, and you can consider whether early repayment is beneficial to you according to your own financial situation.

Tips: Loan early repayment may involve liquidated damages, different types of loans, the way and process of early repayment are different, and the calculation of interest will be different, which is subject to the requirements of the loan contract, please consult your loan relationship manager for details.

If the mortgage is repaid in advance, the interest will of course be reduced. Because after the customer repays part of the mortgage in advance, the interest is no longer calculated according to the total amount of the loan, but is calculated according to the remaining outstanding principal after the early repayment. Customers can then choose to reduce their monthly repayment and keep the repayment period unchanged, so as to reduce the monthly repayment burden. You can also choose to shorten the repayment period and keep your monthly payments the same, which will also allow you to settle your debts sooner.

If the customer finds that the monthly payment is still the same as before and the interest has not been reduced, it should be because the customer has chosen to shorten the repayment period and keep the monthly payment unchanged.

In this way, it looks as if the interest has not decreased, but in fact the interest has decreased. After all, after early repayment, the interest will no longer be calculated based on the total amount of the loan, but on the remaining outstanding principal. However, because the customer chose to shorten the repayment period, the monthly payment has not changed, but because of this, the customer can pay off the debt faster.

Of course, customers can also choose to keep the repayment period unchanged and then reduce the monthly payment, so as to reduce the monthly repayment pressure. When the customer pays off the mortgage, they will find that the total interest paid on the mortgage that has been repaid early is less than the total interest expected to be paid on the mortgage that is repaid on time and in installments according to the repayment plan.

Extended Materials. 1.If you repay the mortgage in advance, you must take out the loan for one year, and there will be no liquidated damages. Prepayment is just paying off your outstanding principal, not all the interest first.

One of the characteristics of the equal principal and interest repayment method is that within 20 years, the interest will be more and less principal will be repaid in the early stage, and the principal will be more and less interest in the later period. Under this premise, prepayment is a bit tangled. However, if you calculate the general ledger, you can still pay a lot less interest if you repay the loan early.

2.Early repayment will theoretically reduce the interest expense, but it is necessary to see whether there is an early repayment agreement in the loan contract, whether there is a default clause to see whether there is a penalty for early repayment, and if the penalty is too heavy, it is necessary to weigh whether to repay the loan early. It should be noted that under normal circumstances, you will have to pay a month's penalty for early repayment, and you can use this money to weigh whether to determine early repayment.

Will the interest decrease after the equal principal and interest, the same principal and interest, will the interest be reduced after the early repayment, and the interest will be reduced after the equal principal and interest early repayment, I don't think it will be, unless you have been for a long time.

Hello answer, I believe that many users have seen the relevant remarks on the Internet that "equal principal and interest early repayment is a loss", and many home buyers feel puzzled, why do they say that equal principal and interest early repayment is a loss? First of all, we must have a basic understanding of equal principal and interest.

Equal principal and interest means that the repayment amount of each month is fixed (including interest and principal), but the proportion of principal in the monthly repayment increases month by month, and the proportion of interest decreases month by month. The main feature is that the monthly repayment amount is fixed during the term of the loan. Suitable for ordinary families with stable incomes, the mortgage can not only afford, but also ensure that it does not affect life.

Suppose a home buyer applies for a mortgage of 200,000 yuan in the bank, the loan period is 10 years, and the loan interest rate is. Using equal principal and interest repayment, the monthly repayment amount is calculated to be about 2,111 yuan.

According to the repayment method of equal principal and interest, the first repayment interest of the buyer is 800, and the repayment principal is 1311; The interest on the second month is 795, and the principal amount of the repayment is 1316,; The interest on the third month is 789 and the principal amount is 1322 ......By analogy, it can be concluded that in the case of the same repayment amount, the principal that the buyer needs to repay in the later period will only be less and less.

Therefore, if the buyer chooses to repay the principal and interest in equal amounts, the buyer has already paid off most of the interest after the halfway point of the repayment period. At this time, it is not cost-effective to choose to repay the loan with equal principal and interest.

Question: I bought a house.

2.9 million. Down payment of 1.5 million.

for 1.4 million.

Do you want to repay your loan early?

First, the front. In general, early repayment only needs to repay the remaining loan principal, and does not need to repay the interest that will be generated later.

2. Specific analysis.

However, different loans and different lending institutions have different regulations, and lenders need to understand first.

For example, if the bank has a mortgage loan, according to the bank's regulations, if the loan is to be repaid in advance, then there will be no liquidated damages after one year of normal repayment, and the early repayment only needs to repay the remaining loan principal.

If the normal repayment time is less than one year, then the bank will charge the lender a liquidated damages, but the overall interest can still be saved.

In the composition of the monthly repayment of equal principal and interest, the proportion of interest will become smaller and smaller over time, and the proportion of principal will increase.

That is to say, the early repayment of the lender is mainly interest, and the later the early repayment, the less interest will be saved.

When the lender chooses to repay the loan early, it is still possible to communicate with the lending institution as soon as possible to see if the lending institution will charge a handling fee, compare the remaining interest, and see if the early repayment is worth it.

It is recommended that you can learn about your current credit situation in the "Xiaoqi Credit Check", get rid of bad loan application habits, and cover untrustworthy behaviors with new good payment records.

3. Does early repayment of equal principal and interest shorten the time or reduce the repayment?

After partial repayment of the mortgage in advance, the mortgage with equal principal and interest repayment can choose to shorten the time or reduce the repayment according to its own needs, both of which have their own benefits.

If you choose to shorten the repayment period and keep your monthly payments the same, you can settle your debt early.

If you choose to reduce your monthly payment and keep the repayment period unchanged, then the monthly repayment pressure can be reduced.

If you have sufficient repayment ability and sufficient funds in hand, you can also choose to pay off in a lump sum in advance.

It should also be noted that after repaying part of the mortgage in advance, the interest will no longer be calculated according to the total amount of the loan, but on the remaining outstanding principal.

Because of this, mortgage prepayment can reduce a certain amount of interest.

If you choose to repay the loan in advance in the early stage of repayment, you can reduce the interest more (after all, the interest will be almost repaid in the later stage of repayment).

If the early repayment is made in a lump sum, the interest will only be calculated until the day of early repayment.

Early repayment of equal principal and interest is not cost-effective. In the first half of the period of equal principal and interest method, the proportion of interest repaid is large and the proportion of principal is small, and after the repayment period is more than half, it gradually turns into a large proportion of principal and a small proportion of interest. The specific calculation formula is as follows:

Monthly repayment amount = loan principal [monthly interest rate (1 + monthly interest rate) number of repayment months] [1 + monthly interest rate) number of repayment months] - 1

Monthly Interest = Remaining Principal x Monthly Interest Rate of the Loan.

For example: Zhang borrowed 1 million from the bank, the repayment period is 30 years, and the annual interest rate is interested, then the monthly interest rate = annual interest rate 12=

Monthly repayment amount = 1,000,000 [RMB.

The interest of the first month is 1,000,000 yuan, and the principal of the first month is yuan;

The interest of the second month is (yuan), the principal of the second month is yuan, and so on.

From the above calculations, it can be seen that the interest expense of equal principal and interest is the most in the initial stage of repayment, and the principal is relatively small, and then as the monthly interest expense gradually decreases, the principal repaid will gradually increase. Therefore, from the perspective of saving interest, it is not cost-effective to repay the loan in advance with equal principal and interest.

Which is more cost-effective, equal principal and interest or equal principal? Is there a loss for early repayment? Don't be fooled! The down payment helps Mr. Shangda explain in detail (3).

Is there a loss in early repayment of equal principal and interest?

No loss, because whether you choose to pay off in a lump sum in advance or choose to repay part of the loan early, the interest can be reduced. As a result, customers will naturally have less to pay. After partial repayment in advance, customers can choose to reduce the monthly payment according to their own economic situation and repayment ability, keep the repayment period unchanged or shorten the repayment period to keep the monthly payment unchanged.

If you choose to reduce your monthly payment, you can reduce the pressure of monthly repayment, and if you choose to shorten the term, you can settle your debt earlier.

What should I pay attention to in early repayment of equal principal and interest?

1. Pay attention to the time requirements for early repayment.

Generally speaking, many banks have time requirements for home buyers to repay their loans early, and some banks stipulate that they can only apply for early repayment after at least one year of repayment, but some banks say that they can apply for early repayment at any time. Among the state-owned banks, Bank of China and China Construction Bank need to repay the loan for one year before they can apply for early repayment, and ICBC needs half a year to repay the loan in advance. In addition, banks such as China Merchants Bank and Bank of Communications need to apply for early repayment after one year, while Huaxia Bank said that it can apply for loan repayment at any time.

2. The loan documents should be prepared.

For lenders who are ready to repay the loan in advance, such as Qingheng, they need to ** or submit a written application before prepayment, and then bring their ID card and loan contract to the bank for approval. If the borrower has settled the entire balance payment, it is convenient for the borrower to deposit enough money to repay the loan early after the bank calculates the remaining loan amount.

3. Don't forget to surrender the policy.

It is not that the buyer pays off the entire loan in advance and is finished, and he still needs to surrender the insurance policy to the insurance company and other departments. Remind all buyers who are ready to repay the loan in advance, after repaying the entire loan in advance, the original personal housing loan housing insurance contract is also terminated in advance, according to the relevant regulations, the lender can bring the original insurance policy and the certificate of early repayment of the loan to the insurance company to refund the premium paid in advance on a monthly basis. The premium refunded by the early repayment of the loan is the present value of the premium paid at the time of early repayment, minus the present value of the insurance premium occupied before the early repayment.

4. Don't forget to cancel the mortgage registration after repaying the mortgage.

Buyers need to go to the local real estate registration center to apply for mortgage registration when applying for a bank mortgage loan, so after paying off the mortgage, whether it is within the contract period or in advance, the buyer should pay attention to canceling the mortgage registration immediately after repaying the loan.