Mortgage prepayment: Most banks do not accept compensation.

Banks have different requirements for early repayment. Industry insiders: Restricting early loan repayments is to lock in customers with high-quality assets.

Recently, a bank issued an announcement stating that it will adjust the compensation fees for early repayment of personal mortgage loans and personal online mortgage loans (consumption) starting from November 1. After the adjustment, early repayment compensation will be charged as stipulated in the loan contract, and the compensation ratio will be 1 of the early repayment principal amount. On the basis of the contract, the local branch has the right to reduce or waive the compensation. The announcement sparked heated debate after it was posted and was later deleted.

Bank rules are different.

“I have already paid off the mortgage once in advance with ICBC, requiring a minimum repayment of 50,000 yuan. I just need to deposit the money into the repayment account and submit the application on the mobile banking app. There are no handling fees, compensation, etc.,” Mr. Wang said, and there is no limit on the number of early repayments per year.

I learned from a personal loan business manager of a Qingdao branch of China Everbright Bank that if the repayment time exceeds five months, you can apply for early repayment. The minimum repayment is 50,000 yuan twice a year, but you need to make an appointment in advance.

Dong Ximiao, chief researcher of the Zhongguancun Internet Finance Research Institute, said in an interview with reporters that the current law does not clearly stipulate that early repayment requires the payment of liquidated damages (compensation). The details depend on the loan contract. In practice, few banks charge liquidated damages (compensation) for early repayment. Even if a few banks have agreements to collect liquidated damages (compensation), customers can often apply for exemption or obtain exemption by purchasing a certain amount of financial products or deposits.

Lock in long-term high-quality assets

When talking about why some banks have adjusted the compensation for early repayment of mortgage loans, industry insiders analyzed that firstly, the effective demand for personal loans has been insufficient and growth has been slow since this year. Banks charge compensation to curb customers' early repayment behavior; secondly, in recent years, due to the increase in profits from the real economy, fee reductions have been more frequent, and intermediary business income has dropped significantly. Intermediary business income has been increased by collecting remuneration.

RealData monitoring data shows that the mainstream first-home loan interest rate in 103 key cities in July was 4.35, and the second-home loan interest rate was 5.07. Overall mortgage interest rates hit a new low since 2019.

However, industry experts generally believe that overall, due to the large bank mortgage loan limit, early repayment of mortgage loans is not common, and the real impact is expected to be limited.

“For those who buy houses at high interest rates, this time will conflict with mortgage repayments, and there will inevitably be some practices of repaying mortgages in advance. Banks also need to warn of such events in advance and make plans and Countermeasures, such as making explanations or waiting in line to repay the mortgage in advance," Yan Yuejin, research director of the Think Tank Center of E-House Research Institute, said in an interview. Related questions and answers: How many times can you repay an Agricultural Bank of China mortgage loan in advance? Agricultural Bank of China mortgage loans can be repaid in advance twice during the repayment period. The first early repayment must be one year after the first loan repayment, and the second early repayment must be 1 year after the first loan repayment. You can choose your own early repayment time. However, for the second early repayment, Agricultural Bank of China requires users to pay off the remaining balance in one go. Therefore, there is no plan to settle the mortgage loan in advance, and users can only make one early repayment. For users, early repayment of mortgage loans can save mortgage interest, but different repayment methods have different interest saving effects. Agricultural Bank of China is one of the four major banks in the country. It is a state-owned joint-stock bank that serves the country's vast agricultural sector. The predecessor of Agricultural Bank of China can be traced back to the Agricultural Cooperative Bank established in 1951. Since the late 1970s, Agricultural Bank of China has successively experienced different stages of development, including a national specialized bank, a wholly state-owned commercial bank, and a state-controlled commercial bank. In January 2009, Agricultural Bank of China was restructured into a joint stock limited company. In July 2010, Agricultural Bank of China was listed on the Shanghai Stock Exchange and the Stock Exchange of Hong Kong. Agricultural Bank of China is one of China's major comprehensive financial service providers and is committed to building a world-class commercial banking group with distinctive operating characteristics, efficient and convenient services, complete and coordinated functions, and outstanding value creation capabilities.

With its comprehensive business portfolio, vast distribution network and leading technology platform, Agricultural Bank of China provides customers with a variety of corporate banking and retail banking products and services. It also conducts financial market business and asset management business, and its business scope also covers investment banking, funds Management, financial leasing, life insurance and other fields. As of the end of 2016, Agricultural Bank of China's total assets were 19.570061 billion yuan, loans and advances issued were 9.719639 billion yuan, deposits received were 15.038001 billion yuan, the capital adequacy ratio was 13.04, and the annual net profit was 184.060 billion yuan. As of the end of 2016, ABC had a total of 23,682 domestic branches, including the head office, head office business department, 3 head office specialized agencies, 37 first-level (directly affiliated) branches, and 365 second-level branches (including provincial branches) Business departments), 3,506 first-level branches (including municipalities, direct-affiliated branch business departments, and second-level branch business departments), 19,714 grassroots business agencies and 55 other agencies. Overseas branches include 10 overseas branches and 3 overseas representative offices. Agricultural Bank of China has 14 major holding subsidiaries, including 9 domestic and 5 overseas. Related Q&A: How many opportunities are there for early repayment of a mortgage loan? Will there be penalty charges?

Xiaoyun suggested: There is no need to repay in advance, the bank will charge liquidated damages

In life, many people choose bank loans because they need capital turnover. However, traditional people often feel a lot of pressure after applying for a loan and owing money to the bank. When they have extra money in their hands, they immediately think of paying off the loan in advance to gain peace of mind.

But at this time, you may be told by the bank: "Because you have violated the loan contract by repaying early, you need to pay a liquidated penalty." You may think that you have to pay liquidated damages for early repayment. Isn't it a "pit"?

Is it really possible to repay the loan in advance? This is not the case, and the routine of early repayment is still there.

Is it legal to require liquidated damages for early repayment?

In fact, the bank’s regulations are definitely legal. According to the provisions of my country's "Contract Law": the creditor may refuse the debtor to perform its debts in advance, except where early performance will not harm the interests of the creditor. The debtor's early performance of the debt will increase the costs incurred by the creditor, which shall be borne by the debtor.

The reason why banks require early repayment and liquidated damages is because this makes the bank collect less loan interest. If the bank does not make enough money, it will naturally want to earn it back by charging liquidated damages.

Therefore, when signing a loan contract, you need to pay special attention to the bank's provisions on liquidated damages.

What are the follow-up behaviors of early repayment

1. Early repayment, credit investigation at the meeting

Prepayment is generally divided into early partial repayment, early repayment, and early repayment. All repayments are made both ways. Judging from the loan contract, whether it is partial or full repayment, early repayment is a breach of contract, and the lending institution may charge a certain amount of penalty interest according to the contract. Early repayment does not necessarily mean strong repayment ability and good credit. Some lending institutions will submit early repayment information to the credit reporting system and display it in "special transactions".

Special transaction information refers to information on extensions (overdues), repayments by guarantors, and use of assets to offset debts during the credit business process. It can be understood as negative information in meaning.

2. Prepayment requires penalty interest

Early repayment is to save future interest, so why do you have to pay penalty interest to the lending institution? As mentioned in the previous question, early repayment is a type of default. This kind of repayment disrupts the loan institution's capital utilization, and the lending institution will lose all interest income on this loan. Moreover, the loan contract also clearly stipulates the penalty interest rate for early repayment. If the loan is repaid early within the period specified in the contract, penalty interest will be charged. Penalty interest is liquidated damages for us, and it is a kind of compensation for lending institutions.

3. Repayment in advance and no further borrowing

The borrower's early termination of the loan contract is already a breach of contract. For this kind of behavior, if he seeks a loan from the same lending institution next time, They will not think that you have financial management skills and can quickly obtain funds, but they will judge that you are using the loan funds for other short-term purposes. In addition, many online loans do not support this kind of "repay the loan in advance and then renew the loan" service. They think there are violations. This kind of customer is also a high-risk customer and may be overdue in the next loan (loan renewal). No return.

The above are the negative effects of early repayment of loans. Of course, when borrowing, you must read the relevant provisions in the loan contract clearly and try to avoid being charged liquidated damages. You must also pay attention to the consequences of early repayment. negative impact.

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