How can bank loans be more cost-effective
1. Matching principal and interest repayment method: Matching principal and interest refers to adding up the total principal and interest of mortgage loans and then sharing them equally every month during the repayment period. As a repayment, he pays a fixed amount to the bank every month, but the proportion of principal in the monthly repayment increases month by month, and the proportion of interest decreases month by month. It can be seen that families with stable income and economic conditions do not allow excessive investment in the early stage can choose this method.
2. Average capital repayment method: The average capital repayment method can gradually reduce the repayment burden with the increase of the repayment period of the borrower. This repayment method is to allocate the principal to each month and pay off the interest between the previous repayment date and the current repayment date. With the passage of time, the repayment burden will be gradually reduced, but because the interest is decreasing, the monthly payment in previous years will be higher than the matching principal and interest, and the pressure will be greater, so this repayment method is more suitable for people with high income and low repayment pressure.
3. Biweekly payment saves interest: Biweekly payment is relatively rare. Biweekly repayment refers to the change of personal mortgage loan from traditional monthly payment to biweekly repayment, and the repayment amount is half of the original monthly payment. Although we still have to pay the same amount of mortgage every month, because the "biweekly mortgage" shortens the repayment period and is higher than the original monthly repayment frequency, the loan principal will also decrease faster, which means that the loan interest returned during the whole repayment period will be far less than the loan interest returned at the time of monthly repayment, and the reduction rate of principal will be accelerated. Therefore, the repayment period is shortened and the total expenditure of the borrower is saved.
4. Monthly interest adjustment: Few people will choose the repayment method of monthly interest adjustment. Because the fixed interest rate was in the rising channel when it was introduced, it was designed to be slightly higher than the floating interest rate in the same period. As long as the central bank raises interest rates once, its advantages will immediately appear. But once the interest rate is cut, the buyers who choose it will suffer. Therefore, in the case of interest rate cuts, it is more cost-effective to quickly convert the previously selected fixed mortgage interest rate into a floating interest rate.