First of all, the interest rate of provident fund loans is relatively low, usually lower than that of commercial loans. If individuals have enough funds, they can choose to repay in advance to reduce the expenditure of loan interest. Early repayment can shorten the loan period and reduce the accumulation of repayment interest, thus saving some interest expenses.
Secondly, prepayment can reduce the debt pressure. For some people with heavy debts, early repayment can reduce the monthly repayment pressure and improve the quality of life. In addition, early repayment can also improve personal credit records, which is conducive to future loan applications.
However, prepayment also has some disadvantages. First of all, prepayment needs to pay a certain penalty. According to different loan contracts, the amount of liquidated damages may vary. Secondly, prepayment may lead to insufficient liquidity. If personal funds are tight, early repayment may lead to other financial needs can not be met.
Pay attention to the following points when repaying the provident fund in advance:
1. Prepayment procedures: Before prepayment, you need to go through the prepayment procedures at the provident fund management center or relevant institutions, fill in the prepayment application form and provide relevant materials.
2. Prepayment amount: The prepayment amount is generally an integer multiple of the remaining loan principal, and the specific amount can be determined through consultation with the provident fund management center or relevant institutions.
3. Interest on prepayment: When prepayment is made, prepayment interest needs to be paid. Please consult the provident fund management center or relevant institutions for specific interest calculation methods.
4. Prepayment period: The prepayment period is generally the prepayment period stipulated in the loan contract, and the specific period can be confirmed with the provident fund management center or relevant institutions.
5. Prepaid fees: Prepaid fees may be charged in some areas. Please consult the provident fund management center or relevant institutions for specific expenses.
6. Impact of prepayment: prepayment may affect the calculation method and repayment period of loan interest, and the specific impact can be known from the provident fund management center or relevant institutions.
7. Prepayment voucher: After prepayment, you need to properly keep the prepayment voucher for future inquiry or proof.