If you have applied for a loan, there will be a loan contract. The repayment is usually on the repayment date of the next month after the loan. For the specific repayment date, please read the details in the loan contract. .
Loan repayment.
Loan repayment, "equal principal and interest, equal principal, interest first and principal later, borrowing and repaying at any time" is a common repayment method in loans. But which repayment method is better? Below, let’s analyze the advantages and disadvantages of the current repayment methods.
1. Equal principal and interest
Determine the monthly repayment amount, calculate the interest payable for that month, and then subtract the interest payable for that month from the determined repayment amount. It is the repayment amount of the principal, and the interest for the next month is calculated based on the remaining principal. This type of loan can be repaid early.
1. Scope of application: Used for industries and borrowers with continuous cash inflows, and the cash is basically uniform, mainly used to supplement working capital and increase inventory. Such as commodity circulation industry, service industry, processing manufacturing industry.
2. Advantages:
(1) The loan is repaid on a monthly basis, the loan balance is continuously reduced, and the loan risk is reduced;
(2) For For borrowers, monthly loan repayments are less stressful, easier to repay, and can avoid one-time huge pressure.
3. Disadvantages:
(1) For borrowers, there are less and less funds available, and the fund utilization rate is not high.
2. Equal-amount principal
Equal-amount principal refers to dividing the loan principal by the number of repayment months, returning a fixed principal every month, and paying interest on the remaining principal. Interest decreases as the loan principal decreases, and the total repayment decreases as the interest decreases. This type of loan can be repaid early.
1. Scope of application: Applicable to industries and borrowers with continuous cash inflow, and the cash inflow is large in the early stage and then decreases. Such as operational car loans, because when the new car is put into operation, the maintenance fee is small and the income is larger. Then the expenses will increase as the vehicle is operated, and the income will decrease. This is consistent with the repayment method of equal principal. This method also applies to the commodity circulation industry, service industry, and processing manufacturing industry.
2. Advantages:
(1) The loan is repaid on a monthly basis, the loan balance is continuously reduced, and the loan risk is reduced;
(2) For For borrowers, monthly loan repayments are less stressful, easier to repay, and can avoid one-time huge pressure.
3. Disadvantages:
(1) If the borrower is a high-quality customer, the loan will be reduced and the interest will also be reduced, reducing the income of the lending institution;
( 2) For borrowers, available funds are becoming less and less, and the utilization rate of funds is not high.
3. Interest first, then principal
Only interest is paid every month, and the principal of the loan is returned in one lump sum when the loan matures.
1. Scope of application: Suitable for short-term loans, suitable for borrowers with no or little cash inflow, such as business operations, engineering, planting and breeding industries.
2. Advantages: For borrowers, there is no pressure to repay, and funds can be fully used for business projects.
3. Disadvantages: For borrowers, there is great pressure to repay the principal in one go in the future. If the capital chain is broken and you cannot repay as scheduled, your personal credit is likely to be affected.
4. Borrow and repay at any time
During a period of time, the lending institution gives the borrower a maximum credit limit. During this period, the borrower can borrow at any time within the maximum credit limit. Get a loan and pay it back at any time.
1. Scope of application: Suitable for borrowers whose cash flow is uncertain or unstable in a certain period of time in the future.
2. Advantages: Borrowers can borrow and repay at any time according to their own needs, which is convenient and flexible and simplifies the procedures.
3. Disadvantages: Since loan risk assessment is generally not done during the credit period, when the borrower's situation changes, the lending institution will still grant the loan without knowing it, increasing the risk of the loan. sex. Therefore, this type of loan requires a post-loan inspection or a simplified assessment before each loan.
Each repayment method has its advantages and disadvantages. When choosing, you can base it on your actual financial arrangements. There is no optimal one, and the one that suits you is the best.