Early repayment is the part that the borrower pays more than the monthly principal and interest. The prepayment without fully paying off the mortgage loan is called partial prepayment. Through contractual arrangements, it is forbidden to repay in advance within the agreed time limit, which is called lock-up period. The lock-up period is 2- 10 years. After the lock-up period, the guarantee of prepayment usually adopts other methods, such as prepayment penalty or rate of return maintenance fee.
Prepayment includes full prepayment, partial prepayment with unchanged loan term and partial prepayment with shortened loan term. The loan bank can only accept the application for prepayment of personal loans from the second repayment month. Although prepayment can save interest expenses, there are four types of buyers who are not suitable for prepayment.
I. Procedures
1. Repayment in full in advance: after the loan bank verifies that the relevant materials are correct, it will go through the formalities of prepayment in full.
2. Early repayment with the same loan term: the loan bank instructs the borrower to fill in the relevant agreement. If the original loan guarantee method is mortgage+insurance, and the mortgage registration has not been completed, you need to go to the insurance company designated by the city center with the original insurance policy, your ID card and relevant agreements to reduce the insurance coverage, and the final agreement should be sent to the corresponding sub-center by the loan bank in time.
3. If the original loan guarantee method is mortgage+insurance and the mortgage registration has been completed, the borrower who chooses non-mortgage+insurance applies for partial repayment in advance and shortens the loan period: the loan bank instructs the borrower to fill in the relevant agreement, and the signed agreement is sent to the corresponding sub-center in time by the loan bank.
4. The original loan guarantee method was mortgage+insurance, which is still within the insurance period, and the mortgage registration has not been completed: the borrower can apply for partial repayment in advance and shorten the loan period, and can go directly to the guarantee center for handling.
Second, the loan repayment procedures
According to the regulations of the bank, customers need to submit a written application one week to one month in advance to agree on the repayment date. Then, according to the agreed date, bring your ID card and the loan contract signed with the bank to the bank to fill in the loan repayment application form and prepayment agreement, and deposit the money to be repaid into your account for withholding the loan principal and interest according to the requirements of the bank, and the bank will automatically deduct the money.
There is no limit to the number of times a bank repays the loan in advance, and it can pay off the loan in whole or in part. It's just that the starting amount of each loan repayment is different from bank to bank. Some regulations are 65,438+0,000 yuan or multiples of 65,438+0,000 yuan, and some banks stipulate that the loan can be repaid in advance if it is more than 1000 yuan.
Some borrowers who repay loans in advance can choose two ways: one is to reduce the monthly repayment amount and keep the repayment period unchanged; The other is to shorten the repayment period and keep the monthly repayment amount unchanged. If the income of the lender keeps increasing, you can choose the repayment method of shortening the loan term and realize the desire of being debt-free as soon as possible. If the income does not increase too much, you can reduce the repayment amount and keep the repayment period unchanged, which will reduce the repayment pressure.
It is worth mentioning that the prepayment application form is irrevocable once confirmed by the borrower's bank. As a supplementary clause of the loan contract, it has the same legal effect as the loan contract. If the loan purchaser fails to repay the loan in advance according to the date and amount specified in the application for prepayment sent to the borrower's bank for any reason, it will be regarded as overdue repayment, and the loan purchaser will bear corresponding liabilities for breach of contract according to the loan contract.