Are there any benefits to prepaying my loan? 5

This year, the lending rates of most banks in China have changed, and many banks have canceled loan concessions, that is, it is equivalent to raising interest rates. According to the loan contract, our monthly payment amount will generally increase from New Year's Day of the following year. Once the interest rate on the loan increases, many people will consider prepayment, so who is it appropriate and which is not good for it?

What is early repayment?

A prepayment is the amount that a borrower pays in excess of the amount of monthly principal and interest payments. A prepayment that does not pay off the mortgage in full is called a partial prepayment.

Through contractual arrangements, early repayment is prohibited within an agreed period, which is known as a lock-up period. The lock-up period ranges from 2 to 10 years. After the lock-in period, early repayment protection usually takes the form of other means, such as early repayment penalty points or yield maintenance fees.

Early repayment includes full repayment in advance, partial repayment in advance with the same loan term, and partial repayment in advance while shortening the loan term.

The lending bank can only accept the borrower's application for early repayment from the second repayment month after the personal loan is issued. Early repayment can save you on interest expenses, but there are some situations where early repayment is not suitable.

Let's take a look at the cases that are not suitable for prepayment:

1. The repayment period of the equal principal exceeds one-third. Because the equal principal amount is divided equally between the total amount of the loan, and the repayment interest is calculated according to the remaining principal, the later this repayment method, the less interest will be generated. If the repayment period exceeds 1 3, the borrower has repaid nearly half of the interest, and the later repayment is more of the principal, and the interest has little impact on the repayment amount.

2. The repayment of equal principal and interest has reached the mid-term. If the equal principal and interest repayment reaches the medium term, the interest has been repaid by more than half, and there is little significance in repaying the loan early.

3. When signing the loan contract, the provident fund loan is used or the preferential treatment is less than 9%. At this time, the early repayment of the loan will be implemented in accordance with the latest loan interest rate policy, and you will not be able to enjoy the original low interest rate discount.

Then the situation that is suitable for prepayment is that in addition to the above situations, others can be repaid in advance, which is more suitable:

1. If it is an equal principal and interest loan, it does not exceed one-third of the loan term, and it is more cost-effective to repay it in advance.

2. If the principal is equal and does not exceed one-quarter of the overall loan term, a part of the early repayment can be made.

3. If you want to pay off the loan as collateral, you must repay it if you have nothing to say.

Of course, you must pay attention to these problems when repaying the loan early:

1. The time for early repayment of the loan by the bank varies. Generally, banks need to repay the loan for one year before they can apply for this business.

2. Some banks need to pay liquidated damages for early repayment, and some banks do not. If the penalty is high, forget it.

3. After repaying the mortgage, you must go to the real estate office with the bank staff to release the mortgage, otherwise your house is still in the mortgage state and you will not be able to handle the transaction transfer.

In short, if the buyer is ready to repay the loan early, he should understand the relevant policies of the lending bank in advance.

Hello! The early repayment of personal housing mortgage loans of ABC is handled as follows: the borrower shall submit a written application to the lending bank at least 30 days in advance and obtain the consent of the lending bank to apply for early repayment of the housing loan.

For early repayment of personal housing loans, the materials to be brought are the borrower's identity document, personal housing purchase guarantee loan contract, and the original housing loan repayment card (discount), and the application should be submitted to the original loan agency in advance as agreed in the contract. Please consult your local lender for details. The standard of liquidated damages for early repayment is subject to the loan contract signed between the customer and our bank, please check the provisions of the loan contract or contact the loan handling branch for verification.

Prepayment is not necessarily beneficial.

The key depends on the contract, some prepayment refers to the one-time repayment of the remaining outstanding loan amount, which is not beneficial; Some can negotiate changes, which is beneficial.

It is advantageous because you can pay less interest.

1. Benefits of prepaying the loan:

1. Compared with the commitment to repay the loan in accordance with the original loan contract, early repayment can indeed save some interest expenses, and it is most suitable to repay in advance for three years in the early stage of general repayment, and early repayment is also a reflection of good personal credit history.

2. If the customer chooses to reduce the monthly payment and keep the repayment period unchanged after early repayment, the monthly repayment pressure can also be reduced; If you choose to shorten the repayment period and keep your monthly payments unchanged, you will be able to settle your debts earlier.

Second, the disadvantages of early repayment of loans: housing loan early repayment is likely to have contract liquidated damages, generally if the borrower repays the housing loan for less than one year, then must pay a certain amount of contract liquidated damages, so it is best to consult the financial institution clearly when repaying the loan in advance. If the user who applies for a housing loan has already exceeded half of the loan repayment period, then the repayment of arrears at this time is actually not worth it, because most of the interest expenses that have been repaid in the early days, and the remaining arrears are more principal.

3. What should I pay attention to when repaying the loan early?

1. Pay attention to the loan contract.

We have signed the corresponding loan contract when we go through the loan procedures, and the loan contract will also make relevant provisions on early repayment. Most banks require at least one year of repayment before applying for early repayment, and there is a limit on the amount of each repayment.

2. Pay attention to capital planning.

For friends who are suitable for early repayment, you must not use all your current funds to repay the loan. At any time, everyone should make a reasonable plan for the funds in their hands, especially to prepare an emergency fund, in case there is an unexpected situation when you can't get the money to solve it.

3. Go through the formalities for release from custody.

The process of early repayment is generally that the buyer first submits approval to the lending bank, and after the bank approves it, the buyer will be notified of the specific month of deduction, and many buyers think that as long as they deposit enough money on the repayment date of the month notified by the bank. In fact, after early repayment, the buyer still needs to go through the mortgage release procedures, which many buyers will forget.

1.Benefits::

After prepaying part of the mortgage, customers can choose to shorten the repayment period, which can also reduce the debt as soon as possible; You can also choose to reduce your monthly payments, so you can reduce the pressure of monthly repayments. In addition, the total interest that customers have to repay after prepayment can also be much lower than repaying the mortgage on a monthly basis according to the repayment plan. The sooner you pay off the mortgage, the sooner you can go through the mortgage release procedures, and the sooner the house can truly belong to you.

2.Disadvantage: Because many banks have regulations that customers must repay monthly installments according to the repayment plan for a certain period of time, if the customer applies for early repayment, it is likely that they will need to pay a certain amount of liquidated damages.

If the mortgage chooses the equal principal and interest repayment method, then in the early stage of repayment, the interest accounts for a relatively large amount, and as the customer gradually repays, the proportion of principal increases, while the proportion of interest decreases. If the customer repays the loan in advance at the later stage of repayment, in fact, the interest has been almost repaid, and the early repayment in time will not reduce much interest, which is not very cost-effective.

The advantage of early repayment of a mortgage is that you can pay less interest, and the disadvantage is that the repayment pressure is high, which is not conducive to making money.

For the mortgage thing, it is advantageous to pay it early or not, and the key is to see what kind of outcome you want.

If the amount of money you have is not very large, then you will pay a lot of money in advance, this money may be borrowed, it may be self-interested, etc., such a topic is definitely inappropriate.

If the mortgage is not repaid in advance, then sometimes you say that your amount of funds is sufficient, and you can't take out a loan if you don't repay your next house in advance, at this time you have to think about it clearly, if it is me, I will feel that I have replaced him in advance, without affecting my quality of life, and I still have money in hand.

1. Prepayment refers to the borrower's act of repaying the loan before the repayment period expires. In some cases, this type of repayment is beneficial to the borrower and disadvantageous to the lender, so whether early repayment is allowed and the conditions under which early repayment should be clearly defined.

2. According to the calculation formula of the general mortgage repayment method, it is divided into two ways: equal principal and interest and equal principal.

Equal principal and interest calculation formula. Calculation principle: The bank collects the remaining principal interest first and then the principal from the monthly payment; The proportion of interest in the monthly contribution decreases with the decrease in the remaining principal, and the proportion of the principal in the monthly contribution increases as it increases, but the total monthly payment remains the same.

It should be noted that: 1. The maximum amount of provident fund loans in various cities should be based on local specifics. 2. For residents who have taken out a loan to purchase a house but the per capita area is lower than the local average level, and then apply to purchase a second ordinary self-owned house, the preferential policy for the first loan to purchase an ordinary self-owned house shall be implemented mutatis mutandis.

Equal principal calculation formula: monthly repayment amount = monthly principal + monthly principal and interest.

Monthly principal = principal number of months of repayment.

Monthly principal and interest = (principal - total accumulated repayment) x monthly interest rate.

Calculation principle: The principal amount repaid each month will always remain the same, and the interest will decrease with the decrease of the remaining principal.

1.First of all, if you repay the loan early, whether you have a balance every year, whether you have liquidity, and whether there is a solution if your family is sick and needs money urgently.

If none of this affects, then it's time to consider whether it's cost-effective or not.

2.How do you think it's worth it or not? To put it simply, can the money you make with your money outperform the interest on your loan?

If you can outrun the bank loan interest or not, of course, you will repay the loan early. If you can, why not manage your own finances.

3.Many people think that they can't outperform loans because they don't know enough about "safe wealth management products" (that is, products that can guarantee returns), and only know about bank deposits and treasury bonds. Of course, these products are not good, otherwise what interest difference does the bank make?

Deposits and treasuries have yielded relatively well over a five-year period. (On the premise of high security!) ）

But if it is medium and long-term, many people don't know, there is an insurance product called increased whole life, the medium and long-term income may exceed the bank's interest, remember what I said is possible, and the specific words must be calculated to know.

4.For example, if the block is 10w, the income can be reached in 10 years, and the income in 20 years can reach 9w. You can see if your remaining loan time is long, whether it will be cost-effective.

Addendum: If you really won't, you are looking for me to help you calculate, please provide:

The principal amount of the remaining repayment, the number of remaining instalments (i.e., how many months to repay), and the remaining interest (if you don't know, the total amount of each monthly repayment will be provided)."

I'm Luna, a financial planner, if the above is helpful and inspiring to you, please feel free to give me a little "yes".

1. Benefits. 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 the remaining outstanding principal after the early repayment, so a certain amount of interest can be reduced.

If a customer chooses to reduce the monthly repayment and keep the repayment period unchanged after early repayment, the monthly repayment pressure can also be reduced. And if you choose to shorten the repayment period, keep it.

With the same monthly payments, you will be able to settle your debts sooner.

2. Disadvantages. If a customer applies for early repayment too early, such as prepaying the mortgage just after getting a mortgage, or even before the agreed repayment plan has been repaid within the specified time, then you may need to pay a certain amount.

Liquidated damages (many banks stipulate that if the loan is repaid in advance after less than one year, then you need to pay liquidated damages, and some stipulate three years, so it is recommended to consult the handling for details.)

Branch customer service).

If you repay the loan in advance at the later stage of repayment, even if you don't have to pay liquidated damages, you can't actually reduce much interest, which is not cost-effective, after all, the interest will be repaid at this time.

Almost. Promotion Information:

Whether or not to repay a 30-year mortgage in advance mainly depends on the customer's financial situation and repayment ability.

If the customer has enough spare money, he can go for early repayment. After all, early repayment can reduce a certain amount of interest, and if you choose to shorten the repayment period after early repayment, you can also settle the debt as soon as possible; If you choose to reduce your monthly payment, you can also reduce the pressure of monthly repayment.

If the customer does not have idle funds in his hand, then he can repay the loan on time and installments according to the repayment plan agreed in the contract, as long as he pays attention to avoid overdue, so as not to damage personal credit, affect the subsequent credit business, and also generate penalty interest.

Of course, if the customer wants to make an early repayment, he should also choose the right time. If you repay the loan in advance, you may need to pay a certain amount of liquidated damages (many banks stipulate that the repayment must be completed for one year, and some stipulate three years); However, if the loan is repaid in advance at the later stage of repayment, the interest will not be reduced because the interest has been repaid almost.